US President Donald Trump’s 25-percent tariff on imported goods from Canada and Mexico is now in effect. The new duty levied against the two North American countries is expected to raise new car prices. One dealer in Glenn Mills, Pennsylvania, called the new tariff “pretty radical” in an interview with Fox Business earlier today, clips of which were posted to X.
David Kelleher, owner of David Auto Group and a Chrysler Dodge Jeep Ram store, said a customer who previously ordered a Ram for is no longer going through with the purchase because the truck’s price jumped from $80,000 to $100,000, meaning it’ll just be sitting on the lot. “Nobody’s gonna buy the truck because it just had a $20,000 price increase,” Kelleher said.
It’s not exactly clear how much new car prices will increase. Kelly Blue Book reported yesterday that prices could increase by at least $3,000, with some rising as much as $10,000 for certain full-size trucks. Parts and vehicles cross North American borders several times during the assembly process before they arrive at showrooms.
Raw aluminum that turns into a piston could cross the border six times, three of which could be subjected to the 25 percent tariff. Retaliatory tariffs from Mexico and Canada would add even more cost to that journey. The tariff also applies to parts for used vehicles, which could increase the cost of auto insurance as repair costs rise.
Automakers have been bracing for the new tariffs since they were first announced days after Trump’s inauguration. He issued a 30-day pause in early February after talking to the leaders of both countries, but Trump doesn’t believe the two countries have done enough to stop the flow of drugs into America.
The president has also proposed another 25 percent tariff for all imported vehicles as his administration investigates any trade disparities with the US’s partners, which would include Japan, South Korea, and the European Union. It could go into effect as soon as April 2, being one of several new tariffs proposed and enacted that apple to pharmaceuticals, semiconductors, steel, and aluminum.