(Click on image to enlarge)

Auto Tariff Blues

Trump reset many tariffs back to 10 percent, but Auto Tariffs Are Still On and Would Raise the Cost of Just Owning a Car

Although Trump paused certain tariffs on Wednesday, those still in place are expected to raise the prices of a range of products. Tariffs on cars and auto parts in particular would in turn push up the cost of insurance and repairs, analysts said.

Those increases might not be as sharp as the thousands of dollars that tariffs are predicted to add to vehicle prices, but they would reach far more consumers. That means drivers’ best strategy for dodging auto tariffs’ biggest financial impacts—holding on to their existing cars—is about to get more expensive.

The costs of car repairs and insurance have already soared 27% and 53%, respectively, during the past three years, far outpacing overall inflation, according to Labor Department data.

If you already know your car is in need of a repair or maintenance, Moody said it would be wise to get the work done soon, and not just to save money. Tariffs could make some parts harder to come by as producers adjust their output, which would put cars out of commission for longer periods. 

When cars cost more and fixing them costs more, insurance companies’ expenses increase, so tariffs are expected to raise auto-insurance premiums as well. 

Pleasant Thoughts in Unpleasant Times

Just remember that when your insurance bill or repair bill goes up, and when there is a delay in getting parts, Trump says this is a tax on China and Mexico, not you.

The same applies to food, washing machines, tools, and clothes.

It might seem like prices are going up, but they aren’t. It’s all in your head. Trump is collecting tariffs from China, Vietnam, Mexico, and Canada, not you.

Now that you know who’s really footing the bill, I sure you will feel better about these price hikes.

Retail Sales Surge in March Led by Tariff Front-Running of Autos

On April 16, I noted Retail Sales Surge in March Led by Tariff Front-Running of Autos

Forecasters accurately predicted tariff front-running would accelerate durable goods sales.

Also note Fed Chair Powell Warns of Higher Inflation and Slower Growth Due to Tariffs

At the Economic Club of Chicago, Jerome Powell makes a cautionary speech.

It seems Powell and everyone buying a car before prices go up fail to grasp Trump’s idea that prices wont go up.

More By This Author: