Tag Archives: Automotive Press Association

Tariff Time

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The price of eggs still hasn’t come down and soon the prices of vehicles are going up. . .

By Gary S. Vasilash

If you were thinking about buying a new vehicle, you might hurry given the application of tariffs on vehicles imported from Canada and Mexico.

No, it won’t mean that the price will go up 25%. But they will go up sufficiently such that you’ll more than notice it on your loan payments.

Anderson Economic Group has figured that vehicle prices will rise on the order of $4,000 to $10,000.

Now, of course, this pass through of pricing isn’t going to be instantaneous.

But it is going to be significant.

According to Stephanie Brinley, analyst at S&P Global Mobility, the vehicle manufacturers are going to be building some 20,000 fewer vehicles per day.

Brinley, speaking to the Automotive Press Association, also pointed out that there is a whole lot of trade going back and forth across the borders, and this is not only parts being produced by suppliers.

Say you want to buy a Ford F-150. Those trucks are built at plants in Dearborn and Kansas City. No problem there.

But say you want a V8.

That’s built in Windsor, Ontario, Canada.

EV sales are already tough.

Chevy has a hit with the Equinox EV. A large part of that is undoubtedly that it is a 315-mile range EV that starts at $41,900. For now.

It is built at the GM plant in Ramos Arizpe, Mexico.

So are the Chevy Blazer EV and the Cadillac Optiq.

Let’s say you want to buy a Ford Mustang GT, which ranks highly in the 2024 Made in America Auto Index from Kogod School of Business.

What’s the likelihood that if the price of other things in the showroom go up (the Mustang Mach-E is built in Cuautitlan, Mexico) the price will be held on the Mustang GT with the gas engine?

Low, I suspect. After all, not only are there going to be fewer vehicles to sell, they’re going to want to make something, and there’s only one way that’s going to happen.

Sure, maybe the vehicle manufacturers will eat the costs. For a while.

But if the trade dispute carries on, there will be little appetite for that.

The Cost of Tariffs on Auto

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“By means of glasses, hotbeds, and hotwalls, very good grapes can be raised in Scotland, and very good wine too can be made of them at about thirty times the expense for which at least equally good can be brought from foreign countries. Would it be a reasonable law to prohibit the importation of all foreign wines, merely to encourage the making of claret and burgundy in Scotland?”—Adam Smith, The Wealth of Nations

Here’s something to think about regarding the possibility of tariffs and how they will affect vehicle pricing and/or availability.


David Christ, group vice president, general manager-Toyota Division, Toyota Motor North America, pointed out yesterday (the day after the election) at a meeting of the Automotive Press Association, that Toyota has 10 manufacturing plants in the U.S. It is building its 11th in North Carolina that will open in 2025 for the production of batteries for electrified vehicles. A $13.9-billion plant.

Certainly a solid U.S. footprint. It employs some 49,000 in the U.S.


Christ said an issue with tariffs is that things not necessarily visible to the end consumer—like parts—can have a big effect.


He said, for example, that the Camry is about 90% U.S. by content. But that means 10% comes from out of the country.


That’s because Toyota, like other manufacturers, has a global supply chain.


OEMs don’t make everything that goes into their vehicles. And suppliers of components not only have to find the lowest-cost places to produce their products, but they need a sufficient number of customers for a given part to be produced in a given plant, so with those two factors they are likely to be located somewhere that isn’t necessarily the U.S.


So regardless of the high level of domestic content, that 10% will drive up the cost of the car.

Who benefits from that?


For customers, this makes the vehicle less affordable.


A costlier vehicle might mean fewer of them are purchased.


Fewer cars purchased means fewer cars built.


Fewer cars being built means fewer hours are necessary for people to work.


The trail of consequences continues. Makes you want to reach for a domestic claret or burgundy.


And while it might be thought that this is something that is not an issue for the traditional domestic manufacturers like Ford and General Motors, it is worth noting that in the 2024 Cars.com American-Made Index, which takes into account assembly location, parts content, engine origin, transmission origin and U.S. manufacturing workforce, the top-10 most-American vehicles are:

  1. Tesla Model Y
  2. Honda Passport
  3. VW ID.4
  4. Tesla Model S
  5. Honda Odyssey
  6. Honda Ridgeline
  7. Toyota Camry
  8. Jeep Gladiator
  9. Telsa Model X
  10. Lexus TX

What you don’t see is either Ford or General Motors. And as Jeep is owned by Stellantis and as Stellantis is headquartered in Hoofddorp, Netherlands, it can no longer be considered a “traditional domestic.” But the folks that build the Gladiator in Toledo, Ohio, still certainly are.


(In case you are wondering: the highest-ranking vehicle from GM is the Chevy Colorado, at #23. Ford makes it at #29 with the Lincoln Corsair. Which means the cost of tariffs would be higher for them.)


“Free and fair trade is the best way to go,” Christ said.


Adam Smith wrote The Wealth of Nations in 1776. That idea has been kicking around for quite some time.