Just when the auto industry thought it had the rules figured out, the playbook changed again.
Earlier this year, former President Donald Trump made it clear: if reelected, he’d slap a 25% tariff on every foreign-made vehicle and part coming into the country. Automakers panicked. Parts suppliers scrambled. Buyers braced for price hikes.
Now? That full-court press just turned into a half-measure. Sort of.
Last week, Trump quietly rolled back part of the plan, carving out exemptions for certain vehicle components—but leaving the bigger 25% tariff on imported cars fully intact. And that leaves buyers, dealers, and factory floors wondering what comes next.
Here’s what we know so far, what changed, and what it means if you’re planning to buy a new car—or hold onto your current one.
What Changed, and What Didn’t
Let’s get one thing straight: the 25% tariff on foreign-built cars is still in place. Nothing about that part has shifted. If a vehicle is assembled outside of the U.S.—whether it’s a German SUV or a Korean EV—it’s still on the hook for the full surcharge.
What did change? Trump agreed to loosen restrictions on some imported car parts, especially those critical to domestic assembly lines. Chips, braking systems, powertrain electronics—things that are tough to replace quickly with American-made alternatives. These exemptions offer some breathing room to U.S.-based automakers trying to keep production moving without going broke.
But make no mistake: this is a patch, not a fix.
Why Automakers Were Panicking
The modern car isn’t built in one place anymore. A Ford built in Kentucky might have sensors from South Korea, a transmission from Mexico, and an infotainment system designed in Germany. Even Tesla—icon of American EVs—relies on imported batteries and semiconductors.
When Trump first floated the idea of taxing all of it, automakers were staring down the barrel of massive cost increases. According to analysts, the 25% part tariff alone could’ve tacked on $2,000 to $5,000 per vehicle, depending on the model.
With the exemption now in place, that scenario’s been dialed back. But the imported car tariff? That one still hits—and it hits hard.
Winners, Losers, and Who’s Holding Their Breath
Let’s break down who’s smiling and who’s sweating after this latest move:
Winners:
- Ford, Tesla, GM: They build most of their high-volume cars here in the U.S. and rely heavily on foreign parts. This carve-out helps them keep the lights on without hiking prices immediately.
- Buyers of U.S.-assembled cars: If you’re looking at a CR-V, RAV4, Maverick, or Equinox, odds are your price tag won’t jump overnight.
Losers:
- Luxury imports: BMW, Audi, Mercedes-Benz—they all import finished vehicles, and now every one of those models costs more.
- Smaller foreign brands: Mazda, Subaru, and others who lack large U.S. manufacturing footprints will feel the heat.
Everyone else? They’re just watching. Especially companies with mixed production—like Toyota or Hyundai—who split manufacturing between U.S. and global factories. For them, it’s a wait-and-see game.
What This Means for Car Prices in 2025
Here’s the part that matters most: yes, prices will go up—but not across the board.
If you’re in the market for a U.S.-built vehicle, this exemption helps keep things in check. But if the model you want is built abroad—or uses too many imported sub-assemblies—expect sticker shock.
Here’s what we’re expecting:
- Imports get hit first. A $50K SUV built in Germany could easily jump to $62K after tariffs and dealer markups.
- Luxury buyers take the brunt. The more imported parts and labor in the build, the worse the price gets.
- Used car demand spikes. With new inventory uncertain and prices volatile, the pre-owned market will heat up—again.
Should You Buy Now or Wait?
Honestly? If you’re leaning toward anything foreign-built, buy now. Prices are likely to tick up as 2025 inventory arrives. Dealers know what’s coming, and they’ll adjust incentives accordingly.
Looking at a U.S.-assembled model? You’ve got a bit more breathing room—but don’t expect discounts to stick around forever. Inventory will start shifting based on what’s tariff-safe and what’s not.
If you’re in the EV market, watch your trims and origin. Tesla’s safe—for now. Hyundai and Kia EVs built overseas? Not so much.
FAQ
What’s the actual tariff policy now?
Imported vehicles: still hit with a 25% tariff. Some critical parts used in U.S.-based assembly plants are now exempt.
Will this affect all new car prices?
Not all. Domestically built cars may stay flat for now. Imported models (especially fully assembled ones) will likely get more expensive fast.
Is it still worth buying foreign brands in 2025?
If you act fast, yes. But by mid-year, expect prices to adjust upward—possibly sharply. Luxury and EV imports will feel it first.
What about used cars?
Used cars won’t be directly hit by tariffs, but rising new prices will push more buyers into the used market—driving up prices there too.
Final Thoughts
This tariff story isn’t over—not by a long shot. What Trump rolled back this week isn’t a full pivot, it’s a partial adjustment. It helps automakers who build here. It does little for those who don’t. And for buyers? It means we’re entering yet another year of car shopping that feels like dodging landmines.
Watch the build origin. Ask your dealer where the parts come from. And move quick if you’ve got your eye on a model that could cross the pricing line once this all kicks in.
We’ll keep you posted as the numbers shift and the market reacts. For now, keep BidForAutos.com in your bookmarks—we’ll keep decoding this stuff so you don’t have to.
