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As we all know by now, Trump is trying to encourage automakers to manufacture their products domestically by imposing a 25% tariff against foreign-made cars. At first, brands like Toyota, Honda, Subaru, GM, Stellantis, Porsche, and Tesla were safe, as they have plants on American soil.

However, what makes it complicated for literally every single automaker who sells in the States is this one line in the fine print: any engine, transmission, electrical, or anything else made in a foreign country will prompt an import fee.

Therefore, even if a car is built in America like Trump demands, any foreign part prompts an import fee. Trump has dismissed concerns about how tariffs affect companies—even Tesla—and urged them to build everything in America to avoid tariffs.

“If you make your car in the United States, you’re going to make a lot of money,” he told NBC. “If you don’t, you’re going to have to probably come to the United States, because if you make your car in the United States, there is no tariff.”

The problem is, there’s no such thing as a purely American car

You’d probably think, “Well, Ford, Chevy, GM, and Stellantis are American companies, so I’ll just buy American.” But it’s not that simple, as every one of those brands uses foreign parts or assembles their cars in a different country.

Dan Ives, the global head of technology research at Wedbush Securities, a financial services firm, says every automaker selling cars in the States is screwed—but the consumer will ultimately suffer.

“U.S.-made cars with all U.S. parts is a fictional tale,” he told NBC. Ivan Dury, the director of insights at Edmunds, said the same.

“There’s no vehicle where every single component is manufactured from the ground up in the United States.”

Consumers will be the ones to recoup that cost

Car buyers can expect to see a price increase of $4,000 up to $12,500 on cars after the tariffs go into effect, as manufacturers will increase the prices of vehicles to offset the import tax.

According to manufacturer reports to the NHTSA, the Jeep Gladiator, Kia EV6, Tesla Model Y, and Honda Passport are the only cars that are “mostly” American. They build them int he states and use materials made in America. But, even then, those models rely on foreign parts.

Others, like Amy Broglin-Peterson, a supply chain expert with the Broad College of Business at Michigan State, say the tariffs will do more harm than good, especially since a purely American supply chain would take years, if not decades, to establish.

“I actually see the parts tariffs to be more of a risk factor than a finished vehicle tariff,” she said. “Establishing a presence here, from a manufacturing perspective, is not a short order. It comes with a very lengthy timeline. It comes with a heavy cost.”

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