2 days ago
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The US President has declared he had no qualms in making consumers pay more for their cars.
US President Donald Trump has told media he “couldn’t care less” if recently announced tariffs put the cost of new vehicles up – with the impacts expected to be felt globally, including Australia.
Mr Trump previously confirmed a 25 per cent tariff on vehicles and parts imported into the United States (US) will be applied from April 3, 2025.
Speaking in a press conference from The White House in Washington, the president denied reports in The Wall Street Journal and other outlets he had requested car makers not to increase prices for US consumers.
“No I never said that”, he said, as reported by NBC. “I couldn’t care less if they raise prices, because people are going to start buying American-made cars.”
The US is the world’s second largest new vehicle market behind China, with almost half the 15.9 million new vehicles sold there in 2024 imported.
The April 3 tariffs have been predicted to increase the sticker price of new cars in the US by as much as $US12,000 ($AU19,000) per vehicle, according to some analysts.
This is around 20 per cent of the average transaction cost for a new vehicle purchase in the US, which was just under $US50,000 ($AU79,300) in 2024 according to the Kelley Blue Book data firm.
The best-selling new vehicle last year was the Ford F-Series with a starting price of just under $US40,000 ($AU63,470) before on-road costs.
The F-Series is made in the US, but in 2024 Ford announced plans to expand production to Canada for its Super Duty versions – which from April 3, 2025 will be subject to the 25 per cent tariff.
The US-made RAM pick-up was the second-best seller in the US last year, but with more than a quarter of its sales being the Mexico-made Ram 2500 model.
Next was the Toyota RAV4 SUV – which currently leads Australia’s new-car sales charts – made in both the US and Canada for US showrooms (Australian RAV4s are made in Japan).
The increase comes due to higher costs for car makers because of the tariffs, with many US assembled vehicles using imported parts also subject to the 25 per cent tariff.
The White House said the tariff will apply to “key automobile parts (engines, transmissions, powertrain parts, and electrical components), with processes to expand tariffs on additional parts if necessary.”
This includes parts from Mexico and Canada – whose automotive supply industries are interlinked with those in the US – with the quantity of imported parts (as opposed to the entire vehicle) subject to the tariff.
The increase in costs for car makers could see prices increase beyond the US as they look to reduce the impact of the tariffs on their respective bottom lines.
The majority of the Top 25 best-selling vehicles in the US in 2024 – which included vehicles from Ford, General Motors (Chevrolet and GMC), Toyota, Jeep, Nissan, Subaru, Honda and Kia – were manufactured domestically.
The best-selling complete import was the Chevrolet Equinox SUV which is made in Mexico.
The tariffs threaten US iconic brand Chrysler – part of the larger Stellantis conglomerate – which in 2025 only offers the Pacifica and Voyager people movers (not sold in Australia) both made in Canada.
