US Consumers Pay 80% of Car Tariffs: Study

New car prices have risen by an average of almost US$2,000 in the US market following the introduction of tariffs on imported vehicles, according to a report published by Bloomberg (subscription required).

The AlixPartners analysis indicates that automotive companies will pass on to consumers about 80% of the taxes they pay on vehicles when they arrive in the neighboring country. That percentage averages US$1,760, according to the consulting firm.

The firm estimated that the tariffs will reduce sales volume over the next three years by one million vehicles. However, it is estimated that by 2030, demand for new cars will rebound to reach 17 million units sold once the impact of the tariffs has dissipated.

Alixpartners analysts also predicted that the 25% tariff on cars will eventually be reduced to 7.5%, while the tax on auto parts will be 5% and even lower for products that meet the regional content requirements of the USMCA.

This forecast is even more optimistic than that of S&P Global Mobility, whose experts anticipate tariffs of 12% for vehicles imported from Mexico and Canada, and 15% for all other countries except China.