Trump’s Auto Tariffs: Higher Car Prices, Gas Hikes, and an Uncertain Road Ahead
By Nik Miles
In a move that’s already sending shockwaves through the auto industry, President Donald Trump has announced a 25% tariff on vehicles and parts imported from Canada and Mexico, which took effect February 1, 2025. As if that weren’t enough to make car buyers and automakers sweat, the administration also imposed a 10% tariff on Canadian energy imports and 25% on Mexican energy imports, which analysts say will drive up U.S. gas prices by at least 10 cents per gallon.
What Does This Mean for Your Next Car?
If you’re shopping for a Chevy Equinox, Toyota RAV4, Ford Bronco Sport, Honda Civic, or Nissan Sentra, brace yourself—many of these popular models are built in Canada and Mexico, making them prime targets for tariff-related price hikes. Automakers now face a tough choice: absorb the added costs or pass them on to consumers. Spoiler alert: you’ll likely be the one footing the bill.
Take General Motors, for example. The Chevy Equinox, the brand’s second best-selling vehicle in 2024 with over 207,000 units sold, is built in San Luis Potosí, Mexico. Its electric cousin, the Equinox EV, along with the Blazer EV and Honda Prologue, comes from Ramos Arizpe, Mexico. Similarly, Ford’s Mustang Mach-E, which had a record-breaking 51,745 units sold in 2024, is assembled in Cuautitlán Izcalli, Mexico.
For some brands, the impact will be massive. Toyota, for instance, builds its best-selling RAV4 in Woodstock, Ontario, and Honda’s popular HR-V comes from Celaya, Mexico. The moment these tariffs hit, prices on these models will almost certainly climb.
Fuel Prices Are Also Taking a Hit
If rising car prices weren’t enough, the new energy tariffs mean you’ll also pay more at the pump. The U.S. imports 52% of its foreign oil from Canada and 11% from Mexico. With refiners now forced to pay steep import taxes, those costs will be passed straight to drivers.
Americans can expect at least a 10-cent-per-gallon increase at the gas station. But if Mexico and Canada retaliate, this could escalate, making commutes, road trips, and daily drives significantly more expensive.
Will the Auto Industry Bring Production Back to the U.S.?
The big question: Will these tariffs force automakers to move production back to the U.S.? The short answer: not anytime soon.
While shifting factories stateside would avoid tariffs, it’s not as simple as flipping a switch. Building new plants, retooling existing ones, and hiring workers takes years—not to mention billions of dollars.
Meanwhile, supply chain disruptions could get worse before they get better. Tariffs could lead to delays in getting vehicles to dealers, and some manufacturers may cut production of affected models altogether. If that happens, expect even higher sticker prices and longer wait times for certain cars.
How Will This Impact Everyday Americans?
Here’s the bottom line:
- New cars will cost more—especially models from Canada and Mexico.
- Gas prices are rising, making driving more expensive.
- Parts and repairs could get pricier, as many components are imported.
- Automakers may slow production, leading to inventory shortages.
- Retaliatory tariffs from Canada and Mexico could escalate the situation further.
What Can You Do Now?
If you’re in the market for a new car, buy sooner rather than later. Dealers may hike prices once the tariffs go into effect, and certain models could become harder to find. It’s also worth considering fuel-efficient vehicles, as higher gas prices will eat into budgets.
Final Thoughts
The 2025 tariffs are shaping up to be one of the biggest disruptions to the auto industry in decades. While the goal may be to bring manufacturing back to the U.S., the short-term reality is higher prices, fuel hikes, and potential job losses. Whether you’re shopping for a car or just filling up your tank, your wallet is about to feel the impact.
Buckle up—it’s going to be a bumpy ride.
