Trump’s Auto Tariffs Could Raise Prices and May Limit Choices for Consumers

Donald Trump has announced a 25 percent tariff on car and auto parts imports, thus raising concerns about higher vehicle prices and fewer choices for consumers, reported Reuters. While the US President claims the tariffs will boost domestic production, industry experts warn that this move will impact buyers' wallets.

Automakers can't absorb such high costs, Andy Palmer, former Aston Martin CEO. Instead, they will raise prices, cut features, or stop selling certain affordable models.

Some of the key models like the Honda CR-V, Chevy Trax, and Subaru Forester may be affected.

While super luxury brands like Ferrari will pass costs onto customers, a few mainstream automakers with tight profit margins have limited options. Furthermore, consumers may also rush to buy cars before prices rise, as was observed in Michigan dealerships.

Meanwhile, industry observers claim that since foreign carmakers reduce exports to the U.S., they may cut production, leading to job losses in their Non-US plants. Some companies are also expected to shift production to avoid tariffs, but this could take years and may not pay off if tariffs are removed later.