Economists say new tariff costs between $2,000 to $12,000 per vehicle
Gov. Gretchen Whitmer agrees with Donald Trump on manufacturing, not widespread tariffs
Michigan’s Governor Gretchen Whitmer delivered a speech in Washington, D.C. for “Build, America, Build.”
- Anderson Economic Group has estimated that Trump’s revised tariffs on parts still results in tariffs of $2,000 to possibly $15,000 per vehicle.
- The Ford Mach-E still falls into a high tariff group because it is built in Mexico.
A Michigan economics group, calculating tariff impact after President Donald Trump’s latest executive orders, has estimated that the least-impacted vehicles will still face a $2,000 tariff and the most impacted will see a tariff of $15,000.
Anderson Economic Group started analyzing the costs of tariffs imposed on a variety of vehicles sold in the United States as soon as Trump signed his latest executive orders on auto tariffs, Patrick Anderson, CEO of the consulting firm, told the Detroit Free Press.
The firm’s new estimates include the changes Trump made on April 29 intended to provide some relief to automakers who assemble vehicles in the United States but use foreign parts in them. The order provides a small break on tariffs for two years to allow automakers time to re-source parts from domestic suppliers.
“The adjustments provide significant and beneficial softening of the cost impact of these tariffs, at least for U.S.-assembled vehicles,” said Anderson, who is the lead author of this study. “However, the cost is still substantial for most American cars and trucks.”
Some vehicles will see a $15,000 hit
Anderson noted that many U.S. consumers have been taking no chances, saying, “The sales surge in March confirms that Americans expect prices to go up because of tariffs, and the revised (Anderson Economic Group) estimates confirm they are right.”
Anderson Economic Group estimated the tariff costs under the adjusted policy as follows:
◾Lower impact: These are vehicles assembled in the United States with substantial U.S. parts content. The estimated tariff costs will be $2,000 to $3,000 per vehicle. Examples: Honda Civic, Honda Odyssey, Chevrolet Malibu, Toyota Camry Hybrid and Ford Explorer.
◾Medium impact: Vehicles in this group will pay a tariff of $4,000 to $8,000. Some Jeep and Ram truck models are in this category, as are the Chrysler Pacifica van, BMW X3, Ford Bronco Sport and Volkswagen Jetta. Some vehicles assembled in Texas, such as the Chevrolet Suburban and GMC Yukon large SUVs, will see a tariff of just under $8,000, a reduction from the previous estimate of $11,000 in tariffs before Trump adjusted the tariffs.
◾High impact: These are mostly full-size luxury SUVs, some all-electric vehicles and cars assembled in Europe and Asia. The tariff impact on these vehicles will be $10,000 to $12,000, with some EVs and European and Asian luxury vehicles having an estimated tariff exceeding $15,000. Mercedes G-Wagon, other Mercedes sedans, Land Rover and Range Rover vehicles, some BMW models and the Ford Mach-E, fall into this group.
Anderson said that because the list prices and content on specific vehicles within model lines vary considerably, so will the tariff impact.
General Motors, however, disagreed with some of Anderson’s findings. GM spokesman Jim Cain said, “The calculation on the large SUVs overstates GM’s tariff exposure on those vehicles. It is almost guesswork.”
Cain declined to provide the exact dollar exposure the large SUVs may have to tariffs, saying that it is proprietary information.
Anderson said he stood by the calculation, citing GM’s filings with the U.S. government as the source for how much U.S. content GM has in those vehicles, hence its tariff exposure.
Trump’s tariff tweak helps only a little
On April 3, Trump put a 25% tariff ‒ the tax an importer pays on a good when it crosses international borders ‒ on all imported vehicles to encourage more U.S. manufacturing. Trump was set to then enact 25% tariffs on all imported parts starting May 3. But given that most vehicles assembled in the United States contain a lot of imported parts, the duties on those parts would run into thousands of dollars per vehicle.
So on April 29, the administration modified its 25% tariffs on foreign auto parts. In a complex formula, the executive orders Trump signed will now allow automakers to be reimbursed for those tariffs up to an amount equal to 3.75% of the value of a U.S.-made car for one year. The reimbursement drops to 2.5% of the car’s value in the second year, and then is phased out.
“The April 29 proclamation reduces tariff costs for some vehicles assembled in the United States, but does not eliminate tariff costs from any vehicle we studied,” Anderson said in the study’s news release. “For vehicles assembled in other countries, including those assembled using substantial U.S. content, the new policy does not significantly reduce the cost of the automotive tariffs.”
For example, the all-electric Ford Mach-E is assembled in Mexico and has a list price of about $55,000. Anderson said before the April 29 executive order, it had a tariff exceeding $12,000. He said it will still have that high tariff.
But the Ford Explorer, which Ford assembles in Illinois and has a list price of about $50,000, previously had a tariff impact of about $4,300. That will drop to about $2,400 under the new rules. For specifics on the study and Anderson’s methodology, visit its website at www.andersoneconomicgroup.com.
Jamie L. LaReau is the senior autos writer who covers Ford Motor Co. for the Detroit Free Press. Contact Jamie at [email protected]. Follow her on Twitter @jlareauan. To sign up for our autos newsletter. Become a subscriber.
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