What Cars are Most and Least Affected by the 25% Tariffs?

LeeAnn Shattuck (00:00)
Welcome back to The Straight Shift. Holy fucking shit monkeys, people. Okay, well, I guess I got to start out this podcast with a strong language warning. There will very likely be more cussing in this episode. So if you’re a little offended by strong language, this might not be the episode to listen to, but it’s important because today we are diving into the latest and greatest way

the US government is screwing with your car buying experience because it wasn’t already complicated enough. The new 25 % tariffs on imported cars are officially here, and they’re about to royally fuck up the entire automotive industry as well as your bank account. Hence, there’s gonna be more cussing. This was not the plan for this episode. I had another lovely topic with a great guest.

But we’re going to need to push that to the next episode in a couple of weeks because this new tariff information is just too important. It’s actually caused me to change my whole content strategy. So stay tuned at the end of the episode, I’m going to tell you what I am going to be doing differently and what I’m going to do to keep you better informed about this ever evolving shit show and how it affects you. So let’s break it down today.

Which automakers will be hit the hardest by the new tariffs? Which ones will be the least effective? And who, anyone, might actually win from this?

Unlike the mainstream media, I’m actually going to break it down into specific models and even in some cases, specific trim levels within a model. I spent the entire weekend creating a database of every single make and model vehicle out there, not including the exotics like Ferrari, but cars that the rest of us actually buy, in order to track this and determine where the tariffs would have the biggest impact.

Whether you’re buying a new car, you’re buying a used car, or you’re just trying to keep your current vehicle running without taking out a second mortgage. We’re going to figure this out. So buckle up, Buttercup. This road’s about to get real bumpy.

Let’s start off with exactly what these tariffs will be based on the executive order that Trump signed on March 26th and will go into effect on April 3rd. The 25 % tariff will be applied to imported passenger vehicles. That means your sedans, SUVs, crossovers, minivans, and light trucks, as well as key automobile

parts like your engines, your transmissions, all the powertrain parts, electrical components, and they have the right to expand it on additional parts as they determine necessary.

Importers of automobiles under the United States-Mexico-Canada agreement will be given the opportunity to certify their U.S. content and they’re somehow going to figure out how to apply the 25 % tariff only to the value of the non-U.S. content in their automobiles. That’s going to be real easy. But vehicles that are compliant with this and parts that are compliant with that agreement will remain tariff free

at least until the government can figure out a process to identify which parts come from where and apply the tariffs as they see fit. So for example, say an engine for a car is assembled in North America, but it contains six bolts and a couple of gaskets that were made in Germany. The 25 % tariff would be applied to those six bolts and two gaskets, but not necessarily to the other 700 parts that are involved in the car.

On top of that, Trump had already enacted a 25 % tariff on steel and aluminum that was shipped to the U.S. And now he’s threatening to extend that to copper. Guess what? All three of those metals are needed to make cars. So why were these tariffs enacted? Trump thinks that he can force all the automakers to move all their auto production to the United States. However, actual economists and experts in the automotive industry all agree

that this is a pipe dream. It is never going to happen, nor should it happen from an economic standpoint. So let’s look at the actual numbers. Last year, 2024, about 16 million passenger vehicles, again, your cars, SUVs, minivans, light trucks, this does not count your big heavy duty commercial vehicles, but about 16 million passenger vehicles were sold in the United States.

About 46 % of them were imported to the tune of $246 billion. Those imports primarily came from our North American neighbors, from Japan, South Korea, and Germany. A few more were imported from other parts of Europe, and then just a handful came from China, Indonesia, Vietnam, and Thailand. Now this data comes directly from the United States International Trade Commission. For decades, North America, meaning US, Canada, Mexico, we have enjoyed

a virtually without borders auto production. That’s thanks to the free trade agreements that have allowed cars and car parts to flow amongst the three countries duty free. It means we haven’t had to pay duties or tariffs and neither have Canada or Mexico. It has made a huge positive impact on the automotive industry and on the economies of all three of our countries. Well, that’s all now been blown to hell.

The new 25 % tariff on imported cars could raise car prices per vehicle anywhere from $5,000 to $15,000. And that’s just based on initial estimates, according to Goldman Sachs. Now this is already on top of the 30 % increase in the prices that we have seen since 2019 due to the supply chain and production disruptions caused by the pandemic. The average new price in the U.S. for a new car is already over $48,000.

So yeah, sure, let’s just jack that up some more. That won’t affect anybody. It won’t be a blanket increase on the MSRP of 25 % across the board because it’s way more complicated than that. As I said, no car is 100 % made in the US or in any country in the world for that matter because parts are sourced and shared globally. They do that for a reason.

It makes sense economically and allows for maximum economies of scale to get the best prices on those individual parts. It’s further complicated by like I was talking about with that engine, know, car engine contains up to 200 individual parts. And that is sourced from dozens of different countries, different companies all around the world, from the raw materials to the individual production parts,

to the assembled components. So the engine block may be made and assembled in one place, and then maybe the pistons come from somewhere else, and then everything’s then fully assembled into the final engine in another place, and then that engine is shipped somewhere else again to actually be put into the car. So these parts zigzag across multiple borders before the car ever actually hits the dealer lot for you to purchase it.

So every time there is a US border crossing now, boom, it’s gonna get hit with a tariff. So it’s going to be very, very complicated and why it’s gonna take them a little bit of time to figure out all the parts components in the tariffs. So they’re gonna have a little more time on that, but not a lot. I think that’s gonna go into effect probably early May, they were saying. So the same tariff can be applied to the same car multiple times before you get to buy it. Fucking fantastic.

What is so frustrating to me about this is that automakers have been working so hard to figure out ways to lower the price of cars since the pandemic because they know that we consumers are seriously fed up with it. We’re to our breaking point. With the average new car price being over $48,000, yet the average individual income in the U.S. under $40,000. That math does not work.

So yeah, let’s just make cars even more unaffordable for the average American. That will be fantastic for the economy. But don’t get me wrong, I am all for bringing more jobs and dollars into the US economy. Remember, I do have a degree in quantitative economics from Stanford. I know how this works. But the majority of the automakers were already investing more in the United States and North American manufacturing in order to cut down on shipping costs, to take advantage of that free trade that we’ve had.

And because honestly, there is only so much real estate in countries like Japan and South Korea and Germany. They’re not that big. There’s no more place for them to build plants in. So it makes sense for them to bring plants to the United States, since that’s one of their biggest markets. For example, Hyundai has a brand new plant that just opened in 2024 called the Meta plant, where right now the IONIQ 5 EV is being built. That’s a weird Jetson like electric SUV,

and their new upcoming three row IONIQ 9 all electric SUV, which I’m very excited about. They are being produced at that plant. It’s a 12.6 billion dollar facility that is going to produce up to half a million electric and hybrid vehicles every year for the Hyundai, Kia and Genesis brands, which are all owned by the same South Korean parent company. And at the grand opening of that plant last fall, Hyundai announced their plan to invest another 21 billion

dollars by 2028 in the United States and North America, including building a new steel mill, as well as making innovations in autonomous driving, robotics and artificial intelligence. The project is expected to create 8,500 direct jobs at the plant itself by 2031, and it will generate about 40,000 direct and indirect jobs in the state of Georgia. That is huge. But this plan was

already in motion. The big contracts were already in place. It’s not like this is something that Hyundai just decided to do last week in response to these new tariffs. It’s been a part of their expansion strategy for years, and it’s on top of the plants they already have in Alabama and Georgia, which they have had since 2005. BMW has also invested billions of dollars in their South Carolina manufacturing facility, which is about two hours down the road from me. I’ve been there. It’s awesome.

Most of the X-Series SUVs are produced there. That plant opened in 1994. BMW moved to South Carolina before I did. Honda has plants in Ohio, Indiana, and Alabama. Toyota has one in Indiana, Alabama, Kentucky, Mississippi. Nissan even has plants in Mississippi and Tennessee. Subaru has had a $2.2 billion plant in Indiana since 1986, before it was even cool

for the Japanese manufacturers to manufacture in the United States. And last year they moved production of their popular Forester SUV to that plant from the Japanese plant, swapping it out with the Legacy sedan production because they’re discontinuing that sedan in the U.S. market. We just don’t buy sedans anymore. These cars produced at the U.S. plants, they’re not just for the U.S. car market. Many are for the entire North American market and some even support global production. At the BMW plant in South Carolina,

they make, say, X5s bound for Zimbabwe. Literally, I was there watching an X5 being built for the Zimbabwe market. It was actually pretty cool. Now that we know how many cars are produced in the US versus outside, let’s do a little deeper dive into which brands and even specific models are going to be hit hardest by these new tariffs.

Some of the luxury brands will be hit the hardest. Lexus, for example, builds nearly all of its vehicles in Japan. That’s why they’re so reliable. Nobody builds cars like the Japanese. They just do it so well. The NX and RX SUVs, those are built both in Japan and Canada. Most of the models that come to the US are from the Canadian plant. Only the ES sedan, both the gas and the hybrid, are produced in the United States. That’s because they’re made at the Toyota plant in Kentucky.

Because the Lexus ES is just a swanky Camry – they share with the same platform. So it makes sense they’re produced there. But other European luxury brands like Audi are gonna be hit hard. Audi doesn’t have a single plant in the United States. All of their vehicles come from either Germany, Hungary, Slovakia, or Mexico. They just closed their Belgian plant this past February. Porsches are also made exclusively in Germany with the exception of the Cayenne SUVs because those are made at the Volkswagen plant in Slovakia,

because they share some of the same platforms with the Volkswagens. Most Mercedes models are also made in Germany, Austria, or Hungary, but like BMW, they have some models that are made in the US. They have a plant in Alabama. If you notice when I’m naming all these US plants and what states they’re in, you’ll notice they are in states, typically southern states or Midwest states, that don’t have unions and have some of the lowest minimum wages.

Alfa Romeo’s, they’re all made in Italy. Land Rovers are all made in England except for the Defender and Discovery models, those they make in Slovakia. Most of your Volvo’s, they’re either made in Sweden or Belgium with just a couple of models produced in South Carolina. So it’s gonna hit these luxury brands hard. And that may not concern you as much, those cars are already expensive and the people that buy them tend to have a little bit more money.

But the other models that are going to be hit the hardest are the entry-level, least expensive models. You know, the ones that people with tighter budgets are trying to buy, the ones that automakers have actively been trying to make more affordable? Yeah, those are gonna get hit hard. Why? Because most of them across all the major auto brands are made in Mexico.

This shouldn’t come as a surprise. It’s cheaper to make cars, at least for the North American market, in Mexico. Wages are significantly lower there than they are in the U.S. And before we start screaming about slave wages, keep in mind, while the wages paid to the Mexican autoworkers are significantly lower than what we pay our autoworkers in the U.S., they are also still significantly above the average wages in Mexico.

So it’s a win-win and the US-Mexico-Canada agreement has provisions to continue to increase those wages. So it’s good for the Mexican auto workers and it’s been good for all of our economies. And of course, these new tariffs just throw a wrench into that whole economic strategy. Pun not entirely intended, but it works. For the regular non-luxury brands, the tariff impacts are gonna be a mixed bag,

because some models are made in the US, some are made abroad, and again, it’s a very complex supply chain across North America and the rest of the world. The big three US automakers, Ford, GM, Stellantis, they’re going to take a big hit. have heavily leveraged that North American agreement and have significant production, both of vehicles and parts, across all three countries.

With those components making multiple border crossings and being subjected to tariffs now every single time. About 55 % of GM’s lineup across Chevy, GMC, Buick, and Cadillac are going to be vulnerable to tariffs. Nearly 75 % of the Stellantis brands, Jeep, Chrysler, Dodge, Ram, are going to be similarly susceptible. Ford is probably going to fare a little bit better, but unfortunately,

their most affordable and popular vehicles like the Maverick Hybrid Pickup Truck, the little Bronco Sport, and the all-electric Mach-E. Yeah, those are all made in Mexico.

In the Japanese automakers, Mazda and Mitsubishi are particularly vulnerable. They’re a little more boutique brands and they are primarily made in Japan. Toyota is going to be very much a mixed bag, as is Nissan, Infiniti and the Korean brands, Hyundai, Kia and Genesis. And I say again, a mixed bag because those companies have a large number of models in their lineup, especially Toyota, with production spread across the globe.

Sometimes it may even come down to a specific trim level within a model. The Hyundai Elantra is a good example. The Elantra sedan, great little sedan by the way, the N-line trim is made in South Korea. But the other trim levels, they might be produced in South Korea or they might be produced in Alabama. You actually have to check the VIN number of the specific vehicle. If it starts with a 5, it came from Alabama. If it starts with a K,

came from Korea. Unless it’s the hybrid Elantra, because all those are made in Alabama.

Another example is the Nissan Rogue. It’s made in Tennessee, except for the top platinum trim level. That one’s made in Japan, along with other trim levels for the other global markets. Subaru, the 2025 Crosstrek, they’re redesigning it for 2026, but the ones right now for 2025, their base and premium trim levels, the two lowest trim levels, those are produced in Japan,

but the sport, limited and wilderness trims are assembled in Indiana. Are you confused yet? It’s so freaking complicated and why I spent all weekend creating a database to track this production for every single make and model down to the trim level. Yeah, relaxing weekend. It’s also why it’s so difficult to predict exactly how much car prices are going to go up due to these

tariffs. There are just too many variables and even the automakers are still trying to figure that out with the government bean counters. And while the automakers will probably absorb some of the increased costs depending on their profitability and their margins, they’re not going to absorb them all. That’s for sure. We as consumers absolutely are going to pay the price. I’m going to work hard to try and keep track of the price increases

by model and even if it comes down to the trim levels. So I’m going to add to the database that I already created and I’m going to figure out a way to make this data available to you as listeners. And again, I’m to tell you a little bit more about that at the end of this episode. Okay, we’ve talked about which makes the models will be the most affected by the tariffs, but which ones will be the least affected? I will give you one guess as to the manufacturer who will be least affected by the tariffs.

Yeah, Tesla! The Model 3, Model S and Model X are made in California, while the Model Y and the Cyber Monstrosity are made in Texas. Yeah, they do source some of their batteries from China and those have already been subject to tariffs for years, but it’s going to have a very small or relatively small impact on Tesla, despite what Elon Musk is saying. So read into all that what you will.

Honestly, the biggest impact to Tesla might be if their stock continues to plummet because everybody’s so pissed off. But other small EV companies like Rivian, which makes its small lineup at a plant in Illinois, and they just built a brand new plant in Georgia, as well as Lucid. And that’s a manufacturer you may not have even heard of because they only have two models and their plant is in Arizona. And they target mostly the California market. Acura should fare a little bit better.

Only one of their vehicles in the US market is made in Mexico. Everything else is made in America. Honda and Subaru, kind of the same. The majority of theirs are made in the US, but everybody’s gonna feel some pain because of that parts moving around and getting hit by tariffs. So the cost of the components to build the cars will go up. Therefore, the price of the cars will go up.

Another thing that is concerning is that all these little parts, a lot of them are made by very small suppliers. The manufacturers don’t make their parts. And I’ve said this in previous podcasts. So if some of these small parts suppliers are forced out of business because they don’t have the margins to absorb the tariffs and many are locked into pricing contracts with the automakers, if they go out of business, now all of a sudden the parts aren’t available. Because in the auto industry, you have these contracts and

it makes the supply chain fragile like we saw during the pandemic. It’s not like, the brand of milk that I like isn’t available at Harris Teeter, so I’m going to go down the street and buy it at Publix. It doesn’t work that way. So we could see part shortages again, like we did during the pandemic. And if that happens, then they will have to slow or even halt production even on the American production lines. And that will inevitably cost U.S.

job. So we’re going to have to wait and see how that shakes out. But we all know what happened during the pandemic. So we know a little bit about what we could expect because we now understand so much more about this intricate supply chain. But the bottom line is pretty much all new car prices will increase. And we are likely going to start seeing those increases very soon, even in the next few weeks.

Subaru was very open and honest and they sent out a memo last week stating they can’t guarantee the MSRP of their new cars once these tariffs hit on April 3rd. Even ones that customers have already ordered, already have a deposit on, may already have a pricing agreement with the dealer, they’re not gonna be able to guarantee that because they can’t guarantee what the MSRP is going to be until they figure it out. At least Subaru was upfront and honest about that. And while

the luxury brands are going to be hit really hard. So are those low priced cars that are coming out of Mexico, the ones that the lower income, tighter budget folks here in the US are really relying on to be able to get a new car. So it’s definitely going to price even more American consumers out of the new car market. But hey, guess what? That means used car prices are also going to go up. We saw it during the pandemic. And some dealers

may take advantage of the situation, use it as an excuse to do price gouging like they did during the pandemic. Hopefully they won’t, but I am expecting it and I plan to call bullshit on it when I do. Some brands may end up getting booted out of the US market entirely or choose to exit like Mitsubishi. They’re a small brand. Everything’s made out of the US. They tend to focus on less expensive cars so they could get completely priced out and they’re in financial trouble anyway.

So expect some shake up with these car brands. And unfortunately, just not buying a car isn’t going to solve your problem either because it’s not just the parts that go into producing the new cars. It’s the parts that go to maintaining and repairing the ones we already have. So it’s going to be more expensive to maintain the vehicle that’s already in your driveway. This is going to be devastating, not just to the automotive industry,

but it’s also going to be destructive to the US economy, potentially even more so than the pandemic. It is going to be more important than ever to stay informed and learn how to buy a car when the industry is in complete chaos. Fortunately, my online course already deals with this because I developed it during the pandemic. And this is gonna be

some similar situations. I’m gonna be tweaking that online course as well, keeping it up to date with information and probably starting to break it down into some smaller courses that is also on my plate. But here is how to stay up to date with this ever evolving shit show in the automotive industry. I am going to launch The Straight Shift newsletter. Now, I hate email marketing and I have, used to have a newsletter and I quit doing it because I didn’t have time and I really, just hate email marketing.

But the reality is it is a necessary part of business. And it’s going to be a really effective way for me to share all this breaking news that I get from inside the automotive industry. I probably get 10 to 12 emails every single day with breaking news inside the industry that is not available to the public. So I want to be able to then turn around and make that information available to you

in a way that is much more specific to how it will impact you, then it’s gonna be reported on in the mainstream media. By the time it boils up to them, it gets very, very generic. And I’m gonna be very specific. I’m gonna use numbers and I’m gonna try very hard to keep the emotions out of it and keep it very economic, focused and not have a political spin on it as best I can.

It’ll also give me a way to get this information out to you faster than I can on the podcast. This podcast is twice a month and that’s just too much time in between with as quickly as things are evolving with this situation. And I just want to keep this podcast more fun and positive. And I can’t do that if I focus on current events all the time, because they’re not fun or positive. So here’s what you need to do if you want to stay up to date with this exclusive content

from my sources directly inside the industry, Go to my website, TheCarChick.com. I’ll put all the links in the description. I’m in the process of redesigning that website too, so it’s a little messy right now, but I am going to get a new contact opt-in form on that site, ASAP, and you can opt into the newsletter. I will be rolling that out as quickly as possible. The first few may not be all that pretty, but I’m gonna get the content out to you guys.

And I promise I am not going to inundate you with emails, not like you sign, you buy something and next thing you know, you get 10 emails a day from the same store. I don’t do that because I hate it for myself. The formal newsletter will probably just be once or twice a month. I’m still figuring that out. And it’s also going to include helpful tips for car buying, selling your car, maintaining your car, all these ways that you can save money. And I will also send out little breaking news bulletins as needed and as a

appropriate, but I am NOT gonna blow up your inbox. I promise I don’t have the time to do it anyway, and I don’t like it myself. I’m also gonna figure out a way to make this database that I’m creating of every single make a model on the market, where they’re produced and how they’re going to be affected by the tariffs. I am still figuring out how to do that, but it will be exclusive content available to subscribers of the newsletter. So again get on my list. I promise not to inundate you

I gotta figure out how to do this the best way to maintain this information, but I will do it. I have a lot to figure out in a very short period of time, but that’s what I do. So I’m dedicated to giving you the most accurate and timely information as possible so that you can make the best financial decisions for yourselves and help you to make sense of whatever you’re hearing through the mainstream media, which is going to be biased one way or another. I’m not gonna be 100 % objective. No human being can.

but I will try to keep it very, very pure journalism. And then we can have a little bit more fun in the podcast, like next week’s episode or in two weeks, which is gonna be all about the paint on your car and how to maintain it, despite the fact that the quality of automotive paint is kind of taking a nosedive. So thanks for joining me, folks. Don’t forget to go to my website and opt in to get the upcoming newsletter and the news bulletins. And you can also check out my online course, the No BS Guide to Buying a Car, Your Inside Track

to Getting the Best Deal – even with tariffs. Thanks, folks. I got a lot of work to do, so I’m out of here. Drive safely.