SAN DIEGO (KGTV) — A new round of auto tariffs are taking effect Saturday, with the Trump administration placing a 25% import tax on car parts.
ABC 10News spoke to experts who say even American car brands source as much as 40% of their parts from abroad.
The new tax on car parts, plus the existing tariff on imported vehicles, is expected to drive up car prices by $5,000 to $10,000.
Now, American car brands say they’re bracing for impact.
The tariff going into effect midnight Saturday morning would be paid by U.S. companies importing parts. Then, that cost is usually passed on to consumers.
This week, President Trump signed an executive order that would allow car makers to get reimbursed for car parts up to 3.75% of the total cost of a car, if it’s made in the United States.
But analysts say a new car could still cost thousands of dollars more.
In the meantime, companies like General Motors say they are getting ready to lose billions of dollars in profits, due to paying more in taxes and an expected drop in revenue.
It’s not just cars themselves that could get pricier.
ABC 10News talked to Joseph Yoon, a consumer insights specialist for the car research company Edmund’s, who says the price of repairs could go up too.
"Most of the replacement car parts that you get at a repair shop, whether it's at the dealer or your mom and pop, they're all imported,” said Yoon. "You're going to be seeing higher repair bills for the scheduled maintenance that you may have. You know, the repair you may have been putting off because it's too expensive might be more expensive."
ABC 10News has previously reported that auto tariffs could make your insurance premiums more expensive, as companies pay more for replacement parts.
But experts say it could take a month or two for prices to go up on cars and parts. Import taxes only affect goods coming into the U.S., not vehicles or parts currently on car lots.
