The price of a new car could jump by between $1,400 and $7,000 for top-selling models, if the Trump administration moves ahead with tariffs on imported automobiles and auto parts, according to the Peterson Institute for International Economics.
In a forthcoming analysis, Peterson calculated the price impact on vehicles in three categories: compact cars; compact SUVs and crossovers, and luxury SUVs and crossovers, based on the 2017 bestselling brands. Using 2018 prices, they added 1 percent for aluminum and steel tariffs and another 25 percent tariffs on all foreign content of vehicles.
"All the cars in the U.S. market have some foreign components," said Jeremie Cohen-Setton, Peterson research fellow. Peterson said the average cost of all cars would rise because of that, whether they are imported or made in the U.S.
For instance, compact cars, such as the Chevy Cruz, Nissan Sentra or Honda Civic, average 51 percent foreign content. The $16,381 base price of a Chevy Cruz could jump by $2,140 if 100 percent of the tariffs were passed through to consumers. A Sentra could jump by $3,075 to about $19,300, based on the fact it has an 80 percent foreign content.
The biggest cost increases would be on some of the luxury models, which have the most foreign parts or are made abroad. For instance, the base price for a Mercedes-Benz GLC-class, with 100 percent foreign content, would jump from $36,846 to more than $45,400 if the proposed tariffs were passed on in their entirety to consumers.