President Trump’s tariffs on Canada, Mexico, and China are set to significantly impact the U.S. automotive industry, potentially driving up new car prices, according to industry experts.

The 25% tariffs on Canadian and Mexican goods, coupled with an additional 10% on Chinese imports, could increase vehicle costs by up to $12,200 for certain models.

A report from Anderson Economic Group suggests that the tariffs will affect a wide range of vehicles, including SUVs, small cars, and electric vehicles. With the average new car price near a record high of $50,000, these increases could further strain consumers already grappling with inflation.

Patrick Anderson, CEO of AEG, told CBS MoneyWatch, “Our analysis shows the proposed tariffs would have a very big effect on North American assembled cars by multiple automakers.” He added, “These are cost increases that cannot be hidden from the consumer.”

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The study projects that battery-powered electric crossover vehicles could see the highest increase of $12,200, while full-size SUVs, pickup trucks, and small cars could face price hikes of $9,000, $8,000, and $6,200 respectively.

Industry experts warn that these price increases could lead to reduced sales, with consumers potentially turning to used cars or vehicles assembled in countries not affected by the tariffs. Ford CEO Jim Farley stated in a recent earnings call, “There is no question that tariffs at 25% level from Canada and Mexico, if they’re protracted, would have a huge impact on our industry with billions of dollars of industry profits wiped out.”

Despite these concerns, President Trump maintains that the tariffs will benefit American industry, claiming they will drive “massive amounts of auto manufacturing” to states like Michigan.

Read more at CBS News