Tariffed Transportation
- Evan Whitfield
- 15 hours ago
- 2 min read
Over the past months since Donald Trump took office, much focus has been on the tariffs he has raised since taking office. One of the areas that has been hit the hardest is the auto manufacturing industry. President Trump announced that there would be a 25% tariff on all foreign-manufactured cars sold in the United States. This does not mean just foreign brands like Toyota or Audi, but even cars from domestic manufacturers like Chevy and Crysler.
This tax does not apply to foreign-manufactured cars that are already on American dealership lots. These dealers typically keep enough cars to sell over a two to three-month period, but after that, we most likely will see a change in price for a large portion of the car supply. Morgan Stanley reported that we could see an increase of up to 12% in car prices in the coming months as a result. This act also subjects foreign-sourced parts for automobiles to the 25% tariff, not just full vehicles. Despite all of this, President Trump warned the Big 3 Detroit automakers not to raise their prices due to the tariffs.
One of the Big 3, Chevrolet, is set to be hit the hardest by this 25% tariff. While Chevy has been one of the hallmark brands of the American Auto Industry, they only manufacture around 45% of their vehicles in the country. This leaves 55% of their production susceptible to the tariff. After the announcement of the tariff, General Motors, Chevy’s parent company, saw a 6% drop in their stock price. Companies like Ford, who make 80% of their cars in America, will be less affected by this but still use some foreign-sourced parts, which, again, are eligible for the 25% tariff. Regardless of what President Trump says, we are sure to see an increase in the price of cars, especially from foreign manufacturers. As for the homegrown brands, changing prices might not go over so well with the public, and they will surely have to make some changes.
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