Tariffs Set to Drive Up Vehicle Ownership Costs in the US

The cost of owning and maintaining a vehicle in the United States is expected to rise significantly in the coming weeks, as a new wave of tariffs on imported auto parts takes effect, the Street reports.

While tariffs are often designed to support domestic industries by taxing foreign goods, the practical impact for consumers is likely to be higher prices across the board—regardless of where the product originates.

President Donald Trump’s administration is preparing to introduce a new 25% tariff on select auto parts, expected to take effect on May 3. Although half of all imported auto parts are protected from tariffs under the United States-Mexico-Canada Agreement (USMCA), the remaining components are often found in cars that would otherwise be duty-free.

The parts affected by these new tariffs include those made with materials such as copper, ceramics, glass, and plastics—key components in advanced driver-assistance systems. By contrast, more traditional exterior parts like hoods, fenders, and bumpers made from sheet metal are currently excluded.

Ryan Mandel, Director of Claims Performance at Mitchell International, a company focused on auto collision repair solutions, noted that there is a lack of transparency around how different tariffs interact.

“There’s not a lot of clarity around which tariffs are stacked on top of each other,” he said in an interview with Repair Driven News.

While some basic vehicle materials remain exempt—such as the sheet metal itself—the aluminum used in car manufacturing is subject to tariffs. Roughly 47% of the aluminum used in vehicles is imported, and about 20% of replacement auto parts include aluminum, making these components more susceptible to rising costs.

Repair costs are already being affected. Mitchell International estimates that steel damage repairs could rise by about $20 per claim, with aluminum repairs seeing similar increases. Repairs involving electronics and safety systems could jump by nearly $48 per claim. These costs are expected to eventually pass down to car owners through higher repair bills and insurance premiums.

Historically, tariffs have led to price increases beyond just the targeted goods. A notable example occurred in 2018, when tariffs were placed on imported washing machines. Prices for washers rose by 12%, but so did the cost of dryers—even though dryers were not directly affected by tariffs. Economists suggest that when products are typically purchased or used together, price increases tend to affect them similarly.

The American Economic Review explored this effect in a 2020 report titled “The Production Relocation and Price Effects of US Trade Policy: The Case of Washing Machines.” The report highlighted how trade policies can unintentionally raise costs for related goods, even when they are not directly targeted.

As with appliances, the automotive industry is now bracing for a similar ripple effect. For new car buyers and existing vehicle owners alike, the upcoming tariffs may add financial pressure at a time when inflation and economic uncertainty are already weighing on household budgets.