By Scott Huntington, March 28, 2025
New tariffs on vehicles threaten to further entrench the economic divide in America, pricing out more working- and middle-class consumers than seen in recent times. According to industry research, U.S. vehicle sales could plummet from 16 million in 2024 to as low as 14.5 million in the coming years, as rising costs place car ownership beyond the reach of millions. Industry analysts estimate that tariffs will add $3,000 to the price of a U.S.-made vehicle and $6,000 to those manufactured in Canada or Mexico without exemptions—another blow to consumers already battered by inflation and stagnant wages.
The greatest casualties of these policies will be those who rely on affordable models like the Honda CR-V, Chevy Trax, and Subaru Forester. Automakers, with their razor-thin margins, may be forced to cut production, further tightening supply and driving up costs. The industry’s wealthiest players—luxury brands like Bentley and Ferrari—will simply pass the burden onto their affluent customers, unaffected by the economic upheaval consuming the rest of the market. Meanwhile, ordinary consumers scramble to purchase vehicles before prices soar, their anxiety a reflection of a broader system that is about to implode.
The Economic Fallout
The fallout will ripple across the global economy. Deprived of their largest market, European and Asian automakers may slash production, triggering job losses and economic instability in their own countries. The question for automakers is whether to ride out the storm, hoping for a policy reversal, or to embark on a costly and time-consuming relocation of production—an undertaking that could backfire should the political winds shift again.
This is the essence of our economic order—suffering shared unequally, where the powerful remain insulated from the destruction their policies create, while the rest are left to endure the consequences.
