You might have to postpone buying a new car thanks to Trump’s tariffs
According to a recently released study, President Donald Trump’s upcoming tariffs against Canada and Mexico are set to significantly increase car prices, adding to rising costs for everyday goods consumed by most Americans. At the same time, Trump has largely ignored the affordability issue even as national polls show rising consumer anger.
The study from Michigan’s Anderson Economic Group determined that the tariffs could lead to as much as an additional $12,000 added to the cost of a car purchase which would likely be passed on to consumers. The group estimates that the cost of a crossover utility vehicle would rise by at least $4,000 and that electric vehicle costs would be three times that.
“That kind of cost increase will lead directly—and I expect almost immediately—to a decline in sales of the models that have the biggest trade impacts,” Patrick Anderson, the CEO of the group, told Bloomberg.
Billionaire Warren Buffet recently criticized Trump’s tariff plans, calling them an “act of war” in a new documentary.
“Over time, they are a tax on goods. I mean, the tooth fairy doesn’t pay ’em!” Buffet said.
Trump has frequently misled the public while discussing tariffs, arguing that they are a cost paid for by foreign governments and entities. But historically the cost of tariffs are passed on to consumers.
Buffet also noted that tariffs can increase the rate of inflation. An analysis by Capital Economics determined that Trump’s tariffs could make inflation go from 2.9% to 4%.
But Treasury Secretary Scott Bessent spun the issue in an interview on CBS’ “Face the Nation” on Sunday, and argued—against most mainstream economic analysis—that inflation would not increase and that tariffs would not be a problem.
Along with tariffs, Trump’s actions to fire federal workers (often because they are involved in efforts to encourage diversity) could add to economic pressures. Economists have warned that job cuts and canceled contracts are leading to private industry cutbacks and that a recession could be inevitable.
Moody’s Analytics recently cut estimates for the growth of the American economy, shifting from an estimate of 2.3% GDP growth on Feb. 21 to 1.2% on Feb 28. Moody’s noted a downward trend in consumer confidence, home sales, and overall trade.
But Trump hasn’t been focused on the economic hardships his policies are exacerbating. He has instead been communicating about opposing immigration, attacking diversity, and pivoting away from supporting democracy in Ukraine.
Some Republicans are expressing concerns about the lack of focus. Conservative economic adviser Stephen Moore, who has consulted with Trump on the topic, told the Wall Street Journal he was “nervous” about the administration’s approach and admitted, “the trend is a little bit troubling.”
Voters are concerned. A recent CNN poll found that 52% of the public said that Trump is not paying attention to the most important issues, while 45% of respondents said the country was on the wrong track—only 39% said it was on the right one.
Congressional Republicans have not addressed the cost issues either, with most voicing support for Trump’s tariffs while pushing legislation to gut key programs like Medicaid while cutting taxes for the ultra-wealthy.
In 2024, Trump campaigned on economic issues, promising to address rising costs on his first day in office. He didn’t do that, and on day 43 the country is in worse economic shape and on a path to accelerate the decline.
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