According to a press release from the White House justifying the high tariffs on imported vehicles, 50% of all 16 million cars purchased by United States drivers in 2024 were imported. The president has stated that the tariffs would bring vehicle production back to the country, where the industry used to be a major economic pillar. Revamping the American auto industry is so important to the president that it even made it into his inaugural speech.
“We will build automobiles in America again at a rate that nobody could have dreamt possible just a few years ago,” he said inside the Capitol rotunda in January. “And thank you to the auto workers of our nation for your inspiring vote of confidence. We did tremendously with their vote. I will immediately begin the overhaul of our trade system to protect American workers and families.”
The tariffs have caused immense concern for business owners and consumers across several sectors, but the automobile tariffs have been a particular point of contention, as much of the country is reliant on car travel.
The United States has more cars than any other country in the world, but other nations have emerged as competitors, with large and affordable car lines. Pieces of the American production process have been offshored to nations with cheaper labor costs. But now, Trump is looking to bring the industry back home, regardless of the side effects.
“Let’s be real honest: Long term, a 25% tariff across the Mexico and Canada borders would blow a hole in the US industry that we’ve never seen,” said Ford CEO Jim Farley in February.
The United States has more miles of public roadways than any other country, leading by a couple of million miles, and a good percentage of those roads are in the Lone Star State. Texans need cars, and we have a lot of them. We also have a lot of debt accrued from purchasing the all-terrain souped-up trucks our roadways are known for.
According to a study from WalletHub, Texans have the highest median auto-loan debt, totaling an average of $23,079. The state also ranks sixth for car-loan debt-to-income ratio, with the average Texan’s debt amounting to 40% of their annual income. It’s not super surprising when you factor in that Texas has the largest truck market in the country, and those diesel engines don’t come at a bargain.
Source: WalletHub
“With vehicles having become progressively less affordable in recent years, many consumers have unfortunately been forced to take out auto loans that are too large relative to their incomes,” said WalletHub analyst Chip Lupo. “Borrowing too much for cars has led to many people having trouble paying back their debts as a result.”
A 2025 base-model Ford F-150, the most popular pick amongst Texas pickup drivers, runs just under $40,000. If you’ve got your eyes set on the next 2026 model, you can expect that price to rise by a small amount. But if you’re looking to fulfill your teenage dreams of driving a Ford Bronco and are considering the latest model of the re-released vehicle, you may have to check between the couch cushions for some extra pennies. The Detroit News is reporting that Mexico-built automobiles with the Ford insignia, like the Bronco, are increasing in price by up to $2,000.
While the president says the tariffs are to discourage the purchase of internationally produced cars, most cars are, to some degree, internationally produced. Experts predict the tariffs will only decrease the number of car purchases across the board.
If you are not one of the Texans with tens of thousands of car-loan debt and you’re still an interested buyer, we suggest holding off until the Labor Day sales and, if you can really wait, until Toyotathon, perhaps.
“Given the newly imposed tariffs and ongoing economic uncertainty, I believe car sales in 2025 will be slightly lower than in 2024,” Dr. Summer Liu, a finance professor at the University of Richmond, said in the study. “This outlook is based on the expectation that vehicle prices will continue to rise and interest rates are likely to remain elevated, both of which could hurt consumer demand.”
