The projected 700,000 drop in U.S. vehicle sales represents just the tip of the iceberg in terms of economic impact. Industry experts warn that these tariffs will significantly affect consumer purchasing power, with typical car prices potentially rising between $5,000 and $10,000 immediately following implementation.1 Patrick Anderson, founder of Anderson Economic Group, emphasizes that "higher prices will directly affect the ability and willingness of consumers to buy cars."23 This price increase threatens to push affordable vehicles over the critical $30,000 threshold, as exemplified by the Hyundai Venue, which could see its price jump from $24,000 to approximately $28,500.1

The ripple effects extend beyond sales figures to manufacturing and employment. Production cuts could trigger layoffs in automotive manufacturing hubs like Illinois, Michigan, and Ohio.2 Stellantis has already temporarily paused production at plants in Canada and Mexico while furloughing 900 workers.2 Even luxury brands aren't immune—Ferrari announced a 10% price increase on certain models in direct response to the tariffs.1 These developments have prompted President Trump to consider temporary exemptions for automakers, acknowledging they "need a little bit of time" to relocate production from countries like Canada and Mexico to the United States.43

The tariffs are expected to significantly inflate vehicle prices across the board, with industry analysts projecting increases of $5,000 to $10,000 "out of the gates" according to Wedbush Securities.1 Some estimates suggest costs could climb as high as $20,000 per vehicle in certain cases.1 Even affordable models will see substantial jumps—a Hyundai Venue currently priced at $24,000 could increase to approximately $28,500, pushing many entry-level vehicles over the critical $30,000 threshold.2

The price hikes won't be limited to imported vehicles. Cars produced domestically will also become more expensive as manufacturers absorb higher costs for imported parts and respond to increased demand for American-made alternatives.1 Even luxury brands are responding, with Ferrari announcing a 10% price increase on certain models after April 1.2 Beyond sticker prices, consumers should expect reduced incentives, higher financing costs, and potentially elevated insurance rates as the industry adjusts to the new tariff landscape.3

The impact of Trump's auto tariffs extends well beyond 2025, with S&P Global Mobility forecasting substantial long-term damage to the automotive market. The research firm has slashed its 2026 forecast by 1.2 million units and its 2027 forecast by 930,000 units compared to projections from just a month ago.1 These dramatic forecast changes represent one of the largest single-month adjustments ever made by S&P, with only the revisions during the 2008-09 global financial crisis and the 2020 COVID-19 pandemic being more severe.21

The tariffs are expected to have lasting economic consequences beyond just sales numbers. Even without retaliation from trading partners, the tariffs would reduce U.S. GDP by approximately 0.04% in the long run, equivalent to the economy being permanently smaller by $12-$16 billion annually.3 Real exports are projected to fall by 1.8% without retaliation and 2.6% with retaliation, as the strengthened dollar makes U.S. goods less competitive overseas.3 Patrick Anderson, founder of Anderson Economic Group, warned that "higher prices will directly affect the ability and willingness of consumers to buy cars," creating a ripple effect throughout the automotive industry and broader economy.45