Trump Says Car Prices Will Fall Due to Auto Tariffs, Experts Disagree: But Stock Market Shows Resilience

In the wake of President Donald Trump’s announcement that the United States would be imposing further 25% tariffs on imported vehicles and associated parts — tariffs set to take effect April 3 — experts mostly disagreed with his position that the trade policy move would lower vehicle prices stateside, while the stock market showed resilience after taking slight losses on March 26.

“You’re going to see prices going down, but it’s going to go down specifically because they’re going to buy what we’re doing, incentivizing companies and even countries with companies to come into America and build,” Trump said, as quoted by CNN.

The outlet went on to suggest that several industry experts and organizations disagreed with the president’s assessment, including Michigan-based think tank Anderson Economic Group, which suggested that the impact on production costs due to tariffs could push prices higher by between $3,500 to $12,000 per vehicle, depending on the model.

Peter Nagle, automotive economist for S&P Global Mobility, recently sounded off to CNN about the potential impact of the planned auto tariffs.

“There’s probably not a vehicle on the market today that wouldn’t be affected in some form or fashion by tariffs. I would think prices would start to change in the one-to-two weeks after the tariffs go into effect,” Nagle said.

“If the tariffs go through this time, by mid-April, we expect disruptions [to] virtually all North American vehicle production amounting to 20,000 fewer vehicles produced per day, which is about a 30% hit to production,” Jonathan Smoke, chief economist for Cox Automotive, said during a media call Wednesday.

“Bottom line, lower production, tighter supply and higher prices are around the corner, reminiscent of 2021,” he added.

Automaker Stocks Take a Dip After Trump Auto Tariff News, but Market Shows Relative Resilience

According to Yahoo! Finance, automaker stocks in Japan and Europe endured a bit of damage in the aftermath of Trump’s auto tariff announcement. General Motors dipped by 7%, while Ford ticked downward by 4% and Stellantis by 2%.

After a losing day for most major markets, a bit of stabilizing appears to be taking place. The S&P 500 was up in early morning trading, though down by just 0.16% as of 11:58 a.m. ET on March 27, while the Dow Jones Industrial Average was down by 0.3%.

Finally, perhaps adding fuel to an existing blaze, on March 27, Trump warned that should Canada and the EU team up to “do economic harm” to the U.S., his administration was prepared to enact tariffs “far larger than currently planned” in response.