Entry-level cars are difficult to find thanks to customs duties.
World leaders respond to President Trump’s auto tariffs
World leaders of Canadians, Koreans, German and Japanese quickly responded to tariffs on President Trump’s cars.
- Stocks of new vehicles for vehicles under $30,000 are falling.
- Automatic imports and some customs duties have changed dealer lots.
- Some automakers are positioned independently to withstand tariff changes, while others have made major adjustments.
The impact of tariffs on the automotive industry is no longer theoretical. Auto rates officially limit the options available to American car buyers. The average new price for a car is close to $49,000, but some popular car manufacturers have options in their portfolio that are close to $30,000. These options are less readily available than before customs days due to costs and profit margins.
According to Cars Commerce, inventory for new vehicles under $30,000 fell sharply from 38% of the total market in 2019 to just 13.6% in the first half of 2025. Americans may want affordable entry-level cars, but automakers are limiting the supply of these vehicles as they are exposed to tariffs.
Affordable new cars are victims of the trade war
There are still plenty of affordable entry-level cars on the market, but there are concerns about a drop in stock of over 24% in just a few years. Cars under $30,000 are primarily built outside the US (92%), says CARS Commerce. Therefore, these vehicles are disproportionately affected by imports and some customs duties. Automakers are limiting entry-level car inventory as these vehicles have proven to be more expensive to import and build than vehicles with higher priced tags.
The new midrange car segment ranges from $30,000 to $49,000. It includes small and medium-sized SUVs, making up almost half of the stock of new cars. With 50% of these midrange new cars being imported, vehicles priced above $30,000 are also feeling the impact of tariffs.
On the bright side there are name plates for two popular affordable cars built in the United States. The Honda Civic and Toyota Corolla are two of the best-selling small cars on the market. The Civic is built in Indiana, and most of its parts come from North America. The Toyota Corolla is built in Mississippi, and most of its parts come from North America. Therefore, the trade war does not completely destroy the entry-level car segment.
How the automotive industry responds to tariffs
The coalition of US automotive industry groups wrote to the Trump administration after 25% tariffs were announced on imports and auto parts in March. The letter raised concerns about vehicle prices duties, vehicle sales, American auto workers, and costs for repairing and repairing vehicles.
https://www.youtube.com/watch?v=jwzthapahnq
President Donald Trump signed an executive order and declaration on April 29th, relaxing car rates. That said, based on recent research by CARS Commerce, there was little action to decorate the automakers about the overall impact of tariffs.
Some automakers shift their production strategies, adjust pricing for some brands, and lower prices to seduce consumers. Ford launched the America, For America, a campaign that defended American-made cars and offered employees prices to customers for more than three months. This campaign saw a 14% increase in sales in the second quarter of Ford. This allowed the automaker to even sell Toyota in the first half of 2025 (a narrow margin).
Ultimately, most major automakers have adapted to automatic rates with some companies like Ford, making lemonade from lemon. The effects of the trade war may be widespread, but there are still plenty of deals for car buyers.
What vehicle is safe from the effects of tariffs?
There are no vehicles that are completely safe from certain tariff impacts, but there are several brands and models that are well-located to survive the storm. Tesla vehicles are some of the most American-made cars on the market. Several other brands produce nameplates that are primarily manufactured in the United States using parts made primarily from America.
Most American cars
- Tesla model y
- Honda Passport
- Volkswagen ID.4
- Tesla Models
- Honda Odyssey
- Honda Ridge Line
- Toyota Camry
- Jeep gladiator
- Tesla Model x
- Lexus Texas
Getting a used car is also a great way to avoid price fluctuations in the new car market. Used cars priced at $20,000-30,000, priced “providing the best balance between affordable and condition” according to Cars Commerce.
