U.S. Auto Industry Faces Rising Costs from Tariffs and Trade Policies

Automakers are currently absorbing the high costs of tariffs on imports like steel, aluminum, and foreign-made parts, which have not yet been passed on to consumers. Despite tariff bills exceeding a billion dollars for major companies, car prices have only increased modestly, partly due to full inventories and strategic pricing. However, automakers are expected to eventually raise prices and pass costs to consumers, especially with new models arriving in 2026, potentially leading to higher sticker prices and more subtle cost increases like higher financing rates.