Trump Moves To Raise Prices On Cars—New Tariffs Imposed

 President Trump issued an executive order placing a 25% tariff on automobiles and auto parts, with few exceptions, imported into the United States. 

The automobile industry has seen massive declines in sales in the last 40 years, from around 800,000 monthly sales in 1985 to around 200,000 monthly sales in 2005. About 50% of cars sold in the United States are wholly imported, and virtually 100% of cars have imported parts.

Domestically produced automobiles are unable to compete on price compared to imported vehicles. Although most foreign auto companies have factories in the United States, they continue to import many vehicles. 

By ordering these tariffs, Trump seeks to boost the domestic manufacture of automobiles and auto parts. However, this will almost certainly raise the cost of all cars. Vehicle prices have surged in the last five years, making new cars unaffordable for most Americans. This is almost certainly why car sales have been so low—it's cheaper to keep the old cars running for as long as possible.

Sales of cars have dropped precipitously starting in 2020, and are down about 75% since the 1980s in the United States. Prices have gone up precipitously as well, leaving most Americans unable to purchase new cars.

Adjusting Imports of Automobiles and Autombile Parts Into the United States – The White House

Motor Vehicle Retail Sales: Domestic and Foreign Autos (LAUTONSA) | FRED | St. Louis Fed