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All new cars sold in the United States will cost more – to build and probably to buy – if the Trump administration imposes a car tariff [19659003] is at least partially imported.
The Department of Commerce reviews tariffs for cars assembled in foreign factories and auto parts manufactured abroad. Every car assembled in the United States contains a significant percentage of foreign coins, according to government data.
"There are no purely American vehicles," said Michelle Krebs, Senior Analyst at AutoTrader. "These are global automakers that use global sources for all types of parts."
Automakers are already warning that fares would increase their costs, in some cases by thousands of dollars per car. General Motors said last week that it could be forced to cut jobs.
US regulators determine how "car" each car is by measuring the percentage of parts and parts from the United States or Canada.
Related: Canada Strikes $ 13 Billion in US Goods with New Tariffs
According to this measure, the two most "American" cars are both Honda – the Odyssey minivan and the Ridgeline van. Three-quarters of the components in each vehicle are manufactured in the United States or Canada.
The Honda Civic, the Acura MDX, the Acura TLX and the Mercedes C-Class come to 70% from the United States and Canada. The highest ranked car by a Detroit automaker is the Chevrolet Corvette, which ranked seventh. About two-thirds of its parts and manufacturing come from the United States or Canada.
The only car manufacturer that builds all its American cars in an American factory is Tesla ( TSLA ) . But even Tesla imports about half of the coins that he uses.
Related: Tesla finally hits the target of Elon Musk for Model 3
All major automakers have factories in Mexico where they build cars for the US market they all should pay a fare on imported completed vehicles.
But tariffs on parts would almost double their estimated import costs: parts prices would cost builders $ 35 billion, in addition to $ 48 billion on imported cars assembled outside the United States. United, according to the American Automotive Policy Council, a lobbying group that represents the three Detroit automakers.
Related: President Ford: Every Part of the Automobile Industry Changes
US Auto Parts Manufacturers Do not Have the Ability to Build All Parts which are currently imported. Most imported auto parts are manufactured in Mexico and other low-wage countries. As a result, automakers will probably pay the rates and pass on a significant portion of the costs.
"Nobody wins in this pricing scenario, jobs are not saved," said Rebecca Lindland, an analyst at Cox Automotive. "Everything will become more expensive."
More expensive cars could mean fewer sales – a drop of 1 million to 2 million vehicles, according to the American Automotive Policy Council. This means that US auto plants would likely produce fewer cars and cut jobs.
Related: The EU warns Trump's car tariffs threaten $ 300 billion in US exports
Used cars could also become more expensive. According to Lindland and Krebs, if people are forced to leave the new car market, the demand for used cars and prices will increase.
The exact increase in auto prices can not yet be known. Each car has a different mix of parts, and the exact amount of the fares has not been announced. Car manufacturers can absorb a portion of the cost to maintain sales.
But estimates show that vehicle costs will be significantly higher.
The cost of a car with 35% of imported parts would increase by $ 2,000 with a 25% rate on parts, according to the American Automotive Policy Council. Toyota ( TM ) estimates that the cost of the Camry, which is built in its Kentucky factory and is the nation's best-selling sedan, would increase by 1800 $ rooms rates. And General Motors ( GM ) warned that tariffs could force the company to cut jobs in US factories because of an expected drop sales associated with higher prices.
CNNMoney (New York) First published July 2, 2018: 2:28 PM ET
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