Car buyers, brace yourselves—prices are about to soar, and there’s no escaping it. Former Ford CEO Mark Fields warns that President Donald Trump’s new auto tariffs will send vehicle costs through the roof, impacting every single car on the market.
“The cost of vehicles will go up. It’s just math,” Fields told CNN. “There is absolutely no vehicle that won’t be impacted by tariffs.”
Trump’s 25% tariff on imported cars has officially taken effect, with additional tariffs on car parts expected by May 3. The financial impact is staggering. Bank of America estimates that these tariffs will add a whopping $26 billion to the cost of US-assembled vehicles—translating to an average price hike of $3,285 per car. And that’s just the beginning.
Even American-Made Cars Won’t Be Spared
Think buying American will shield you? Think again. Even vehicles assembled in the United States rely heavily on foreign parts, meaning their prices will climb, too. Goldman Sachs predicts that fully imported cars could see price hikes ranging from $5,000 to $15,000.
So, who pays the price? Automakers are expected to absorb some of the increased costs, but consumers will still feel the sting in the form of higher sticker prices and fewer incentives. With car prices already nearing record highs, many shoppers might be priced out entirely.
A Death Blow to Auto Sales?
Experts warn that these price hikes could crush demand. According to Bank of America, if automakers pass the full 25% tariff onto consumers, US car sales could plunge by 3.2 million vehicles per year—a staggering 20% drop. Even if automakers try to soften the blow by covering part of the cost, sales could still tumble by 2.5 million units.
In a surprising twist, Trump reportedly warned auto executives against hiking prices, threatening even steeper tariffs if they do. The president, however, denied making such threats, instead touting the tariffs as a game-changer for American manufacturing.
“This is going to lead to the construction of a lot of plants,” Trump said. “You’re going to have a lot of people making a lot of cars.”
But is that realistic? Fields calls the idea of automakers simply absorbing the cost “just another way of imposing price controls.” He also noted that Trump’s threats, even if vague, put auto executives in an impossible position.
The Ripple Effect: Layoffs, Supply Chain Chaos, and Factory Closures
While the White House insists tariffs will create jobs, the reality could be far messier. Some US workers are already feeling the pinch—hundreds of Cleveland-Cliffs steelworkers have reportedly been laid off due to reduced demand from automakers.
If assembly plants in Canada and Mexico shut down, US suppliers will also take a hit. Bank of America warns that tariffs on auto parts could disrupt the supply chain and even trigger production stoppages.
Some automakers are scrambling to cushion the impact. Ford, for example, is offering employee pricing to all consumers from April 3 to June 2, allowing buyers to purchase vehicles at below-dealer-invoice prices. While this could help in the short term, it’s unclear how long automakers can sustain such offers.
Moving Production to the US? Easier Said Than Done
Fields acknowledges that the tariffs will “absolutely” push some automakers to relocate jobs back to the United States. However, shifting production isn’t as simple as flipping a switch.
Bank of America estimates that moving the assembly of one million vehicles back to the US could help carmakers offset some tariff costs. But building new factories takes years and billions of dollars—money that automakers may be hesitant to invest without knowing how long these tariffs will last.
Even if companies commit to moving production, there’s another major hurdle: labor shortages. With an aging workforce and ongoing immigration crackdowns, the US may not have enough workers to fill the new manufacturing jobs. Fields recalls how Ford struggled to hire and retain factory workers even during the sluggish post-recession economy.
“We had a tough time getting qualified people who were willing to do this hard, repetitive work,” Fields said. “And we saw a lot of attrition from people who said, ‘Wow, this is really hard.’”
The Biggest Winners? Not Who You Think
Ironically, while Western automakers scramble to adjust, Chinese car manufacturers could emerge as the real winners. Companies like BYD and Geely might swoop in to fill the demand for affordable vehicles—especially if they set up production in the US.
“The biggest winners are the Chinese manufacturers,” Fields warned. “While Western automakers are distracted managing these tariffs, the Chinese OEMs will keep their heads down and continue innovating.”
As car buyers brace for impact, one thing is clear: The era of cheap cars is coming to an end. And there’s no turning back.
