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(Updated at 2:10 p.m. Wednesday, March 5: After talking with the heads of G.M., Ford and Stellantis and with Canada’s prime minister, Justin Trudeau, President Donald Trump has given automakers a one-month exemption from his 25 percent tariffs on Canada and Mexico.)
WASHINGTON – The price of some new vehicles could rise drastically – as much as 25 percent – as a result of tariffs imposed Tuesday by President Donald Trump on imports from Canada and Mexico, and the impact of the tariffs could be felt quickly.
“All automakers will be impacted by these tariffs on Canada and Mexico,” said John Bozzella, who heads the Alliance for Automotive Innovation that represents all major automakers in the U.S. except Tesla.
“Most anticipate the price of some vehicle models will increase by as much as 25% and the negative impact on vehicle price and vehicle availability will be felt almost immediately.”
Bozella was quoted in a story by Reuters that was posted Tuesday. Alliance members include General Motors, Ford, Stellantis, Toyota, Volkswagen and Hyundai.
A month ago, Ford CEO Jim Farley warned that tariffs would “blow a hole” in the U.S. auto industry.
Under Trump’s executive orders, all goods imported from Canada and Mexico are subject to a 25 percent tariff, the exception being energy products from Canada which have a 10 percent tariff.
In his formal address to a joint session of Congress on Tuesday night, Trump warned Americans to be prepared for “a little disturbance” from tariffs. “Tariffs are about making America rich again and making America great again, and it’s happening and it will happen rather quickly,” the president said.
According to a story in The New York Times, the U.S. imported 1.98 million cars from Mexico in 2023 and 1.24 million from Canada. The story posted Tuesday noted that it’s often difficult to determine what is an American-made vehicle and what isn’t as automakers have supply chains that cross borders.
It explained that the 2024 Chevrolet Blazer sport utility vehicle is assembled in a plant in Mexico using engines and transmission that are produced in the U.S. while Nissan’s Altima is built in Tennessee and Mississippi using some engines fromJapan and transmissions from Canada.
The Reuters story quotes the American International Dealers Association as saying, “Tariffs could directly contribute to thousands of extra dollars on sticker prices.”
