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The Tariff Exception That Could Not Be Reversed
March 3, 2025
Why What We Eat Matters
March 5, 2025
A car could cost us a whopping extra $12,000 because of a Trump tariff.
By looking at this car seat, we can see why:
But there is much more.
The Transmission, the Piston, and the Capacitor
Like the car seat, just one module in a car’s transmission will experience a newly tangled supply chain.
Told by Canadian manufacturer Linamar, the story of a transmission starts with steel chips and scrap that visit Pennsylvania and Ohio. From there, at an Ontario factory, they join parts from Illinois and aluminum from Mexico. After that, they are placed in a transmission in the Midwestern U.S. just before a final return to Ontario where they wind up in an auto that was probably sold in the U.S.
Including Mexico, a piston has a similar journey:
But we cannot stop here. The list becomes endless. It is true too of a car’s capacitor:
And this table takes us to the true gargantuan reach of the Trump tariffs. From the “Share of North American Content” to the everyday brands, the tariffs can hide everywhere:
Our Bottom Line: The Impact of Trump Tariffs
The Anderson Economic Group (AEG) estimated the Trump tariffs’ price hike for four kinds of vehicles:
The price hikes perfectly demonstrate who pays for a tariff. Yes, when taxed items move into the U.S., an automaker like Ford pays that tariff. Because the U.S. government gets the money, it might cite increased revenue from a domestic or foreign firm. Really though, it came from you and me. Anyone that bought a pickup truck saw her tax bite go up by $8,000.
Then, entering the world of negative externalities, the impact ripples to auto industry jobs as sales shrink. It could take us to Wall Street with the decline in auto company stock prices. We also could wind up with elevated demand for Japanese cars…until they also get a tariff. Then, perhaps demand soars for used cars?
Yes, this is all hypothetical. But it becomes more real when we follow the travels of car seats and transmissions and capacitors.
My sources and more: With tariffs on our neighbors (probably) imminent, our past car seat post became ever more relevant. Then, taking the next step, this CATO article was a good complement as was the NPR look at wires and WSJ’s transmission story. Then CBS told us the car prices.
