Trump's 25% Tariff Set To Hike Imported Car Prices Up To $15,000 Higher, Goldman Sachs Warns

Following President Donald Trump’s latest tariff move, U.S. consumers could be expected to spend up to $15,000 more on an imported vehicle. This move could sharply rattle auto demand and reshape the competitive dynamics of the U.S. automotive market.

In a note shared Thursday, Goldman Sachs analyst Mark Delaney, CFA, said the new 25% tariff on imported autos and certain parts, effective April 3, could raise vehicle prices by $5,000 to $15,000, depending on the model and country of origin.

How Much Could US Auto Prices Rise Amid Tariffs?

According to Goldman Sachs, the price increase assumes tariffs are applied to vehicles ranging from $20,000 to $60,000 — a bracket that covers a large portion of the U.S. auto market.

Delaney said that U.S.-assembled vehicles wouldn't be spared either. With roughly 50% of their components sourced from abroad, tariffs on foreign-made parts could raise the cost of a U.S.-built vehicle by an additional $3,000 to $8,000, based on similar assumptions.

While the White House executive order carves out an exemption for USMCA-compliant content — meaning vehicles and parts meeting certain thresholds of North American origin will only face tariffs on their non-U.S. share — the impact is still expected to be widespread.

Read now: Trump Imposes 25% Tariffs On Auto Imports, Says ‘This Will Continue To Spur Growth’ — Canada, EU Slam The Move

Goldman Sachs Sees Earnings Impact For US Automakers

Of the 16 million light vehicles sold in the U.S. in 2024, only 8 million were assembled domestically, per the White House fact sheet. Further, even those U.S.-built cars contain a significant chunk of foreign content, intensifying the price impact.

Goldman Sachs estimates that a low- to mid-single-digit increase in car prices could lead to a low-single to low-double-digit drop in auto sales, all else being equal.

That's based on historical elasticity patterns between price and demand in the mainstream vehicle market.

That spells potential trouble for automakers and suppliers alike.

"We continue to believe that tariffs are a downside risk to earnings for both original equipment manufacturers and suppliers," Delaney said.

Winners And Losers: Will Tesla And Rivian Gain?

The blow may not be evenly distributed. Tesla, Inc. TSLA and Rivian Automotive Inc. RIVN, which manufacture all their U.S. market vehicles domestically, may emerge relatively unscathed.

On the other hand, Ford Motor Co. F and General Motors Co. GM may face a tougher balancing act.

Goldman's estimates show that Ford sources 80% of its U.S. vehicle content domestically, while GM comes in at about 60%-70%. Both companies also export some U.S.-made vehicles, adding complexity to their tariff exposure.

Still, automakers aren't without tools. GM has previously said it could offset 30% to 50% of tariff-related costs through price hikes, supply chain adjustments or production shifts.

"There are some scenarios where the U.S. OEMs can fully offset tariffs," Delaney said, "but also scenarios where OEMs see material negative earnings per share revisions."

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