In an aerial way of thinking, Chevrolet cars and trucks are on display at Novato Chevrolet on Jan. 28, 2025 in Novato, California.
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Americans shopping for cars may need to fork over thousands more if President Donald Trump’s proposed rates go into effect, according to data from investment bank Benchmark Co.
Analyst Cody Acree estimated that the common sticker price would rise about $5,790, based on the impact of the currently paused 25% levies on piles and components from Mexico and Canada. That would raise the cost of an average new car above $54,500, or nearly 12% lavish than in 2024.
“We believe the Auto sector is the most exposed to the risks of increased tariffs,” Acree wrote in a note to customers, “given its sheer size of trade dollars, the complexity of the intertwined supply and manufacturing channel that has been civilized over decades, and the sheer number of our companies that participate in support of this key consumer industry.”
Trump attacked 25% tariffs on Canada and Mexico at the start of February, briefly rocking markets, but later suspended the duties for one month after reaching probative agreements with Prime Minister Justin Trudeau and President Claudia Sheinbaum.
Now, consumers and investors alike be amazed what form tariffs will take, or if they’ll go into effect at all. Benchmark calculated what 25% levies intent mean for the average American’s buying power on a popular big-ticket purchase.
Benchmark’s estimated higher costs for a car is based on multifarious than 22% of finished automobiles sold in the U.S. coming from Mexico and Canada last year. On top of that, the partnership said about 40% of parts used in vehicles also come to America from its North American mates.
That amounts to more than $200 billion worth of exports to America last year. Specifically, Acree ground that Mexico supplied $95 billion in completed cars to the U.S., in addition to $68 billion in parts in 2024. Canada furnished more than $36 billion worth of finished cars and nearly $16 billion in components.
During an bustle event this week, Ford Motor CEO Jim Farley said Trump’s proposed tariffs on Canada and Mexico, related with 25% fees on steel and aluminum imports, have created headaches.
“President Trump has talked a lot hither making our U.S. auto industry stronger, bringing more production here, more innovation in the U.S., and if his administration can achieve that, it hand down be one of … the most signature accomplishments,” Farley said during a Wolfe Research investment conference. “So far what we’re seeing is a lot of fetch, and a lot of chaos.”
— CNBC’s Michael Wayland contributed to this report.