U.S. President Donald Trump’s newly announced 25% tariff on imported vehicles is expected to have a disproportionate impact on working-class car buyers, as most low-cost new cars sold in America are manufactured overseas.
With the average new car price nearing $50,000, lower-income buyers rely on the few remaining vehicles under $30,000—most of which are produced in Mexico, South Korea, or Japan.
A Reuters review found only one model in this price range, the Toyota Corolla, assembled in the U.S. Industry analysts warn that the tariff will either drive up prices beyond affordability or push automakers to abandon these models altogether.
“New vehicles across the board are going to be more expensive,” said Sam Fiorani of AutoForecast Solutions. “That’s going to push more buyers into the used market, which will also raise the price of used vehicles.”
This shift will hurt Trump’s own voter base, particularly rural Americans and lower-income households, who heavily supported him in the 2024 election. Many foreign-made cars, including those from American automakers like GM, could see significant price hikes.
Despite concerns, Trump remains unmoved. “If the prices on foreign cars go up, they’re going to buy American cars,” he told NBC News.
However, with many American brands also producing abroad, consumers may have fewer affordable options, forcing many to turn to an increasingly expensive used car market.
