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by Peter Suderman
Reason.com
Tariff price shock absorbers: In 2019, the average price of a new car in America was less than $40,000. But in the years since the pandemic, prices of new vehicles have risen rapidly. As of October 2024, the average price of a new car was more than $47,000.
Incoming President Donald Trump’s threatened tariffs could raise those prices by nearly $3,000, according to an estimate from Wolfe Research, since the cost of tariffs is likely to be passed on to consumers.
That estimated price hike would be a direct result of Trump’s proposal to erect 25 percent tariffs on goods imported from Canada and Mexico. As The Wall Street Journal reports, the additional import taxes would hit low-priced vehicles especially hard, since many auto manufacturers have moved production of less expensive, low-profit-margin vehicles to Mexico.