Car makers fear that tariffs will hike the price of some vehicles by as much as 25%

A trade group representing nearly every major automaker warned Tuesday that new 25% tariffs on imports from Canada and Mexico imposed by President Donald Trump will lead to drastic price hikes.

“All automakers will be affected by these tariffs to Canada and Mexico,” said John Bozzella, who heads the Alliance for Automotive Innovation that represents all major U.S. automakers except Tesla.

Its members include General Motors, Ford, Toyota, Volkswagen, Hyundai and Stellantis. “Most anticipate that the price of some vehicle models will increase by as much as 25%, and the negative impact on vehicle pricing and availability will be felt almost immediately,” he added.

“You can’t relocate automotive production and the supply chain overnight. That’s the challenge and the dilemma: auto tariffs in North America could end up raising costs for consumers before the jobs come back home,” Bozzella added.

Last month, Ford CEO Jim Farley warned that 25% tariffs on Mexico and Canada would “blow a hole” in U.S. industry. “What we’re seeing is a lot of cost, a lot of chaos.”

The United Auto Workers welcomed Trump and highlighted his plans for further tariffs in April.

«We are glad to see a U.S. president take aggressive action to end the free trade disaster that has dropped like a bomb on working people,» according to the labor group.