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The Ride: Proposed import tax could add $$$ to cost of new car

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President Trump thinks of it this way: Every car built in Mexico and sold in the United States means fewer jobs for Americans.

So he proposed a tax on cars built in Mexico that are sold here.

That hasn't gotten anywhere so far, but there is a Republican proposal on Capitol Hill that would impose a tax on all imported goods.

If that plan is approved by Congress, the price of a vehicle from Jaguar Land Rover might jump by as much as $17,000 and a Volvo by $7,600, according to a “thought exercise” released this week from Michigan-based auto industry analysis firm Baum & Associates. 

The firm estimates nearly every auto maker would need to increase prices to recoup their costs if an import tax is imposed. Most affected are auto makers that sell cars in the U.S. but do not produce them here. American car companies would fare best. Tesla, which builds all of its cars in the U.S., is expected to be unaffected by the import tax. Ford vehicles would increase by about $282, GM’s by $995, according to Baum.

Overall, average price increases under an import tax would be about $2,500 per vehicle, or eight percent higher than they are currently.

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