Trump’s new auto tariffs, which begin April 2, could increase average car prices by 5%.

President Trump has announced sweeping 25% tariffs on all foreign-made car and light truck imports, which include SUVs. The president confirmed the tariffs, which take effect April 2, will be permanent for his entire second term. Trump’s tariffs were executed via an executive order and will impact key auto industry foreign trade partners like South Korea, Japan, Mexico, Canada, and Germany. The president stated “if you build your car in the United States, there will be no tariff,” while adding that his new policy will generate “tremendous growth” in the US car industry, Financial Times reports. Consumers can expect prices to inevitably rise. The US International Trade Commission studied what would happen if the government imposed auto tariffs and found that a 25% tariff would reduce American vehicle imports by about 74% and increase average car prices by 5%. New auto import tariff rates starting April 2 represent a 22.5% increase over the original 2.5% figure.