Gov. Gretchen Whitmer agrees with Donald Trump on manufacturing, not broad tariffs
Michigan Governor Gretchen Whitmer gave a speech in Washington, DC on “Build, America, Build.”
- Anderson Economic Group estimates Trump’s revised tariffs on parts will cause tariffs of between $2,000 and perhaps $15,000 per vehicle.
- The Ford Mach-E is still in high tariff groups as it is being built in Mexico.
Michigan economics groups have calculated the impact of tariffs after President Donald Trump’s latest executive order, estimated that the least affected vehicles will still face a $2,000 tariff, while those most affected will see a $15,000 tariff.
The Anderson Economic Group began analyzing the costs of tariffs imposed on various vehicles sold in the United States as soon as Trump signed its latest executive order on automobile fares, Patrick Anderson, CEO of the consulting firm, told the Detroit Free Press.
The company’s new estimates include changes made by Trump on April 29th, aimed to provide some relief to automakers who assemble vehicles in the US but use foreign parts. This order provides a small break in duties for two years, allowing automakers to reorganize parts from domestic suppliers.
“This adjustment provides a significant and beneficial softening of the costs of these tariffs, at least for vehicles assembled by the United States,” said Anderson, lead author of the study. “But for most American cars and trucks, the cost is still quite expensive.”
Some vehicles will get hits worth $15,000
Anderson said many US consumers are saying, “The March sales surge confirms that Americans expect prices to rise due to tariffs, and the revised estimates (Anderson Economic Group) confirm they are correct.”
The Anderson Economic Group estimated tariff costs under a policy adjusted as follows:
- Lower impact: These are vehicles assembled in the US and are essential parts of the US. Estimated tariff costs range from $2,000 to $3,000 per vehicle. Examples: Honda Civic, Honda Odyssey, Chevrolet Malibu, Toyota Camry Hybrid, Ford Explorer.
- Medium shock: Vehicles in this group pay customs duties between $4,000 and $8,000. The Chrysler Pacific Bag, BMW X3, Ford Bronco Sports and Volkswagen Jetta are similarly Jeep and Ram Truck models in this category. Some vehicles assembled in Texas, such as the Chevrolet suburbs and the large-scale SUVs of the GMC Yukon, will see tariffs below $8,000, a reduction from the previous estimate of the tariffs of $11,000 before Trump adjusted the tariffs.
- High impact: These are mainly full-size luxury SUVs, some all electric vehicles, cars assembled in Europe and Asia. The impact of tariffs on these vehicles is between $10,000 and $12,000, with some EVS and luxury European and Asian vehicles exceeding estimated tariffs of $15,000. Mercedes G wagons, other Mercedes sedans, Land Rover, Range Rover cars, some BMW models, and the Ford Mach-E fall into this group.
Anderson said that because the prices and content of a particular vehicle list within the model line are quite different, so tariffs also have an impact.
However, General Motors opposed some of Anderson’s findings. GM spokesman Jim Cain said, “The calculations for large SUVs exaggerate GM’s tariff exposure on these vehicles. That’s pretty much the norm.”
Cain refused to provide accurate dollar exposure that large SUVs may need to address tariffs, saying it is unique information.
Anderson said GM was standing in the calculations, citing the US government’s submission as a source of information about whether GM has on those vehicles and therefore has customs exposure.
Trump’s tariff adjustments are just a little helpful
On April 3rd, Trump placed a 25% tariff – the taxes that importers pay on their property when they cross the border – to promote US manufacturing on all imported vehicles. Trump was planning to impose a 25% tariff on all imported parts starting May 3rd. However, given that most vehicles assembled in the US contain many imported parts, the obligation for those parts is thousands of dollars per vehicle.
Therefore, on April 29, the administration changed the 25% tariff on foreign auto parts. In a complex formula, an executive order signed by Trump allows carmakers to be reimbursed against the maximum tariffs equivalent to 3.75% of the value of a US-made vehicle over a year. The refund will fall to 2.5% of the car’s value in the second year and will be phased out.
“The April 29 declaration reduces tariff costs for some vehicles assembled in the United States, and the butt does not eliminate tariff costs from the vehicles we investigated,” Anderson said in a news release of the investigation. “For vehicles assembled in other countries, including those assembled using substantial US content, the new policy does not significantly reduce car fares.”
For example, the all-electric Ford MACH-E is assembled in Mexico and has a list price of around $55,000. Anderson said there were tariffs in excess of $12,000 before the April 29 executive order. He said it still has that high tariff.
However, Ford is gathering in Illinois, and the Ford Explorer, which has a list price of around $50,000, previously had a tariff impact of around $4,300. Under the new rules, it will drop to around $2,400. For more information about the research and Anderson’s methodology, please visit its website at www.andensoneconomicgroup.com.
Jamie L. Larrow is a senior Autos writer covering Ford Motor Company for the Detroit Free Press. Please contact Jamie at jlareau@freepress.com. Follow her on Twitter @Jarouan. Sign up for our car newsletter. Become a subscriber.