President Donald Trump confirmed that a 25% tariff will be imposed on all cars and light trucks not manufactured in the United States, effective April 3. While the administration says this move will boost domestic manufacturing, the reality for many Americans—especially low-income families—is higher prices and fewer affordable options.
According to the U.S. News report, the new tariff will apply not just to fully assembled vehicles but also to critical auto parts like engines, transmissions, and power systems. That means even vehicles partially made overseas, or repaired with imported parts, could become more expensive to buy and maintain.
How Much More Could You Pay?
The U.S. News Report notes that the average price of a new car is already close to $48,000, and these new tariffs could add as much as $12,000 more, depending on how much of the vehicle is sourced outside the U.S.
That kind of increase puts reliable transportation even further out of reach for many families who already struggle to afford car payments. Low-income workers, who often rely on older vehicles or purchase used cars from brands that assemble parts internationally, will likely feel the squeeze the most.
And it’s not just about buying a car. Imported parts will also cost more, making car repairs and maintenance harder to afford. For many, that could mean putting off needed repairs—or losing access to a working vehicle altogether.
Why It Matters
In much of the U.S., especially in rural or suburban areas, having a car isn’t a luxury—it’s a necessity. Public transportation is often limited or nonexistent, and driving is the only way to get to work, school, doctor’s appointments, or the grocery store.
When car prices jump, and repair costs rise, it hits people with the fewest resources the hardest. Older adults on fixed incomes, single parents, and people working multiple jobs may be forced to make tough choices—like going without transportation or taking on more debt.
And because many jobs—especially in food service, healthcare, delivery, and construction—require a car, the ripple effect could be widespread. Increased costs could lead to missed work, fewer job opportunities, or even job loss.
Retaliation, Inflation, and the Bigger Picture
The announcement has already sparked criticism from international leaders, including from Canada and the European Union. Some countries are threatening retaliation, which could lead to more tariffs on U.S. exports and drive prices up even further for everyday goods.
According to a recent Wells Fargo report covered by U.S. News Report, tariffs currently in place or planned for the coming weeks will affect over $1 trillion in goods—more than twice the amount affected during Trump’s first term. The bank also warns that these policies could drive inflation and slow economic growth, just as many households are trying to recover from recent price hikes.
What to Expect Next
While the administration has hinted at some “flexibility” for cars made under the U.S.-Mexico-Canada Agreement, most consumers won’t be spared from the financial impact. For low-income households, the cost of staying on the road could soon go from difficult to impossible.
