There are now 25% tariffs on everything made in Canada and Mexico and this could increase to 50%. Trump promised to double the tariffs if Canada and Mexico retaliated and they did.
There was a 2018 study of proposed tariffs in the 10-25% range.
However, cars are now 34% more expensive than in 2018.
The impact will be in about 2-3 months as the inventory on dealer lots is cleared. There are some vehicle makers like Honda who say they will stop selling Mexico made cars to the USA.
2018 25% Tariff Average Price increase for U.S. built-vehicles – $2,279
2018 25% Tariff Average Price increase for imported vehicles – $6,800
2025 25% Tariff Price increase for U.S. built-vehicles – $3,400
2025 25% Tariff Average Price increase for imported vehicles – $9,100
2025 50% Tariff Price increase for U.S. built-vehicles – $6,800
2025 50% Tariff Average Price increase for imported vehicles – $18,200
The Ford Mustang Mach-E (51.7K sold in 2024) is primarily manufactured at the Cuautitlán Stamping and Assembly Plant (CSAP) in Cuautitlán Izcalli, Mexico.
Hyundai and Kia (44k & 43K) has a plant in Georgia.
The Honda Prologue (33K) is assembled at General Motors’ (GM) Ramos Arizpe plant in Mexico.
The Chevrolet Equinox EV (29k) is manufactured at General Motors’ (GM) Ramos Arizpe plant in Coahuila, Mexico.
The BMW i4 (23k) is produced at BMW’s main manufacturing facility in Munich, Germany.
The Chevrolet Blazer EV (23k) is manufactured at General Motors’ (GM) Ramos Arizpe plant in Mexico.
The Nissan Ariya is made at Nissan’s Tochigi factory in Japan.
The Toyota bZ4X is manufactured in both Japan and China.
The BMW iX is produced at the BMW Group Plant Dingolfing in Lower Bavaria, Germany.
Analysis by Bloomberg Economics shows that the new tariffs could reduce overall U.S. imports by 15 percent. While the Washington, DC-based Tax Foundation estimates that the tariffs will generate around $100 billion per year in extra federal tax revenue.
A unilateral 25 percent tariff on these goods could slash Mexico’s GDP by some 16 percent according to Bloomberg Economics, with Mexico’s auto industry bearing the brunt.
A 50% tariff would devastate the export part of Mexico and Canada.
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
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How does a trade war increase Tesla sales in the United States? This year Tesla sales declined steeply in California his biggest market. Something about Elon’s strange arm gesture has caused European sales to sharply decline. Of course Elon’s fan boys and stock holders will do what they can to present a false narrative. Elon, however, has apparently lost interest in Tesla as he rifles through Social security and Medicare’s 5 trillion dollar files.
P.S. Is Tesla ever going to get into the small delivery van business with small EV delivery vans? -I think small EV delivery vans are a “magic app” for EVs… -Lots of stop and go within maybe a 300 mile circuit, charge battery back up at night? -I think this would be a sweet spot for EVs.
I watch another channel (on youtube) called “The Electric Viking” run by a man named Sam Evans. He is tapped into Tesla and all their competition. He made a very insightful statement in one of his latest videos about the fact that Tesla should stay away from “racing to the bottom” in terms of trying to “out-cheap” the Chinese in cheaper electrics. I think this is a very wise approach. -Maybe Tesla should set an “entry-level product price” at $20000/car and not go below that? -Maybe $60-70K for a light truck (comparable to Ford F150)? As battery tech improves and prices decrease with higher volumes produced, Tesla could increase range or features of their low-end (low-priced) vehicles but maintain a “low-end floor” for pricing….
There goes another $100 million contract for Musk.
https://www.cbc.ca/news/canada/toronto/ford-ripping-up-province-contract-with-starlink-1.7448763
Tesla Sales Plunge 63% in EU’s Second-Biggest EV Market, France.
High tariffs on strategic enemies like China and Russia make sense.
But high tariffs on other free and democratic nations makes no sense at all.
And blaming Canada and Mexico for America’s $150 billion a year illegal drug habit is just silly.
If you want to dramatically reduce illegal drug use in the US just start arresting people caught using illegal drugs– in public– and force them into 30 days of drug rehab for a first offense, 60 days for a second offense, and 90 days for each subsequent offense.
And sentence anyone giving illegal drugs to other individuals to one year in prison. And sentence anyone selling illegal drugs (including adolescents) to four years in prison.
But Americans need to stop blaming the rest of the world for their drug problems.
i think Trump is just using tariffs as a stick for negotiating with our neighboring countries about issues that affect all of our countries…. Same with China….
Most people will just wait 4 years to buy a new car.
Companies have a similar problem.
It would be reckless to build a new factory, have it ready in 1-2 years, and then have the next president cancel the tariffs.
This is why there are treaties regarding trade, to provide stability for the economy to grow.
Trump has now violated USMCA and WTO, and also threatening NATO allies with invasion.
If USA is unhappy with the terms of the deals, which is strange because USMCA replaced NAFTA in 2020 while Trump was president, you bring up your grievance and renegotiate.
Ending 40 years of free trade over night, rugpulling the whole world, is madness.
Imposing tariffs without having a plan to re-shore production, secure alternate raw materials sources, and increase power production for refining and manufacturing is less than half a plan.
Keeping with the spirit of nbf, this is a perfect time to push hard for industrialization of Space.
Also, the US needs to be ready for war. Tariffs now are a dry run for wartime disruptions.
I remember the point of removing trade barriers was sold, in large part, as a way to lift up the poor in other countries, (China) so they would be our democratic buddies.
Now China is about to claim the Moon, and, just like building islands in international waters — once done, hard to reverse without overwhelming force.
Aren´t the tariffs installed to encourage Canada & Mexico to do more about drugs etc. ?
What exactly are the conditions to cancel the tariffs?
I Agree with this. They were holding the US back – like a passionless spouse. They had far greater potential as economic and social systems, but perhaps always assumed we would just be there. This is the wake-up call. The decline and complacency and social-indugence stops now or they can go their separate ways. Like any marriage – Co-dependent or co-inspiring? Reinforcing each other’s strengths or taking advantage of each other’s weaknesses? The Great Refresh – everyone should go through a divorce or 2.
Urrr..
Hope everyone has some free cash to buy the ‘dip’ in tomorrow’s ‘Opportunity’.
While the price of cars may be up 34% since 2018, the consumer cost of those cars is up far more, perhaps doubled or tripled, in that short time. Tariffs won’t significantly worsen or solve the affordability problem.
A car’s cost is much different than its sale price and gas mileage; a well-bought collector car might appreciate and pay you to own it, while a lemon in an unpopular model might cost you for failed/expensive repair attempts and have no resale beyond the scrap yard.
The revolution in car design since the mid 2000’s has broadened their underlying technologies to the point that ordinary mechanics can only work on certain makes. A dealer’s natural business model is to maintain cars for the life of the lease/warranty, but not invest in parts for secondary owners. I estimate that the “affordable lifespan” of a car for second owners is approaching the lesser of seven years, or 150,000 miles. That’s why the average age of America’s “fleet” keeps going up; I see 20 to 25 year old cars on the road, than 10 to 15 year olds. Cars since 2010 are less affordable to keep on the road and getting more so. And fewer second owners means more depreciation for the new car buyer.
Environmentally, the carbon footprint impact of cars becoming disposable, non-durable assets will eventually outweigh any savings due to efficiency. No free lunches, as the economists say.
The resolution to this imbalance may have been presaged by the Great Depression. At that time, European premium cars boasted turbo and super-chargers, fuel injection, and glamorous coach-work, while one and two seat cars were made for the masses. After the war, America’s upsurge in middle-class incomes led to mid-tier car models dominating, and with ubiquity, affordability returned. I predict tomorrow’s hot rods – the affordable cars young people prefer – will be simpler low-tier models, much like Ford’s outdated model T’s and A’s became in the late 40’s. Unless we follow Europe’s example where, to this day, fewer people own cars and drive compared to America.
And while having fewer cars won’t automatically recreate Europe’s geography and mass transit infrastructure – it may add to our lack of connection to people from other regions, if not balkanization. As the Viking Cruises CEO says in his ads, travel is enlightening.
40% of crude oil refined in the us comes from Canada. Hello inflation. Guess it will be helping electric cars that way too.
The US is supposed to be the world’s leading democracy. It seems to have elected an unopposed king.
I’ve not been able to find the percentage of us made tesla cars that are exported. Apparently tesla is cagey about this number. But they do seem to make up an impressive third of all us car exports. Well that’s all going to go away soon.
Make sure to buy the dip tomorrow chaps….
They will lose 50,000 vehicle sakes in Canada, plus many more in Mexico, plus any power wall sales will be gone. Tesla parts are from China and other countries which are also subject to tarrifs. I see prices going up rather than down.
Tesla Sales Plunge 63% in EU’s Second-Biggest EV Market, France.
I expect to see canada cutting out the middleman by creating new pipelines to the East and West. As well, they will start refining their own oil for export to EU countries.
That will only take them ten years.
Democracy, but leading whom? Trump does his best to provoke creation of an EU federal state. A leader should be needed for anyting, and not push itself into isolation. Now, the US will return to being a regional power, like so many others.
Using tarifs to move production to local suppliers has a lot of other side issue’s.
If there is a shortage of production capacity, than prices go up unit the capacity is added (years) . If there is a shorage in staff, it can take decades.
But US build dealers see competition all of a sudden become expensive by force. They will also increase prices simply because there is no alternative.
In short: Inflation
Additionally, the instability will reduce investments. If you want to build a new carbuilding factory you could choose the US, but the next president might undo it. Or Mexico, Canada and the EU might team up and create a new block or put trarifs on US car sales. Then it might be better to choose for Mexico. But because you do not know, you will wait to invest.
Canada to put 100% tariffs on Teslas
https://www.teslarati.com/tesla-100-tariffs-canada-trump-minister/
Or not , what about the loss of buying power that will impact the possibility of buying a car ?
Trade wars don’t help the people, full stop.
Only the lazy, spoiled, indulged, and uninspired People, of course. But we deserve better trading partners than that – there are reams of fat and excess and indulgence lopped on top of Canada’s economy and its mediocre citizens; and utter disarray and chaos in Mexico.
Some times a good, stiff Slap is needed to set it aright.. be it a TV, computer, or other…
Both Canada and Mexico have the potential to up their Game…
If Canada and Mexico are lazy and fat, then why complain about their trade surpluses with the US? Surely they should be in deficit?
Brussels will be happy.
This comment does not really make a lot of sense.
Trading balances (in deficit or otherwise) have nothing to do with laziness or lack of inspiration.
Trading offers the possibility of getting access to the best products/services/components/raw materials, whether in terms of price, performance, or the balance of price and performance you want. The natural pressure that forced companies to seek trading partners outside the US, was COMPETITION WITHIN THE US MARKET for certain goods and services that were provided by foreign partners.
Do your population and industries need semiconductors for the new shiny tech? Make trade agreements with Taiwan, japan, and China.
Do your population and healthcare systems need pharmaceuticals that are produced in Europe? Make trade agreements with the EU.
Do your industries and import/export need ore/oil/or access to some geographic regions (like the Suez Canal or Panama Canal)? Make agreements with the relevant parties.
It takes years to establish new supply chains/trade partners, not to mention new factories. The general assumption: “I put tariffs so people will relocate manufacturing to the US,” ignores that even willing parties will take months/years to comply, and in the meantime, they will still look for other trading partners outside the boundaries of US, because they have already been hit in their profits, and have to find new markets for the products/materials they have in inventory.
All of a sudden, manufacturing in US has become significantly more expensive for US-based industries, (and purchasing goods has become more expensive for us consumers), while all the companies that traded with the US will be open to trade in other markets so manufacturing certain goods will become cheaper in other countries since there will be a higher offer for components and materials that were previously sent to US.
Understand that tariffs are used to protect companies, until they are strong enough to compete. But this? Another layer of bureaucracy to hamper business and if you cant compete, then sue (Bezos) or raise tariffs (Trump)? Others will most likely raise them too, great business plan.