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California’s car market faces major shock as new tariffs drive up prices of imported vehicles

Jacob Shelton April 3, 2025

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Tom Kingston, in a high-visibility shirt, walks through new vehicles at a railroad delivery yard in suburban Denver on Sept. 5, 2024, prior to loading his auto-hauler truck with nine new Audi vehicles destined for Denver-area car dealerships.

San Diego, California – Toyota Tacomas, the top-selling mid-size trucks in the United States, are set to become significantly more expensive, as new tariffs on imports from Mexico and other countries come into effect. With most Tacomas manufactured in a plant east of Tijuana, Mexico, and another facility in Guanajuato, these tariffs are expected to add anywhere from $5,000 to $10,000 to the price of each vehicle, and potentially as much as $15,000, according to analysts from Goldman Sachs.

The tariffs, announced by President Donald Trump on Wednesday, have raised concerns among both consumers and car dealerships in the U.S. At the Toyota Chula Vista dealership, located just a few miles north of the Mexican border, management declined to comment on the potential impacts of the tariffs. However, an anonymous salesperson at the dealership shared insight into how the price changes are expected to unfold.

While prices for Tacomas and other vehicles made with foreign parts won’t rise immediately for models already in stock, the salesperson indicated that prices will increase as new shipments are delivered. “I expect prices to go up probably in a few weeks,” said the salesperson. “It will also be more expensive for people to service and repair their cars since many parts come from Mexico and China.”

Additionally, the cost of used vehicles is expected to climb, as more consumers look for alternatives to the higher prices of new cars. The salesperson noted that this shift could further intensify the demand for used vehicles, contributing to rising prices across the board.

President Trump, who has expressed little concern over price hikes resulting from the tariffs, previously told NBC News that he “couldn’t care less” if the cost of some cars goes up, as long as American-made vehicles are prioritized. He also suggested that any increased auto finance charges could be written off as income tax deductions, though this doesn’t address the broader impact on consumers.

Analysts are predicting that the effects of the tariffs will be felt far beyond the automotive sector, with higher prices also expected for groceries, produce, and other goods. “I think you’re starting to see a little more panic and concern about the tariff,” said Art Wheaton, director of labor studies at Cornell University’s School of Industrial and Labor Relations. “It’s not just cars — it’s going to affect a lot of things.” As the new tariffs take hold, both car buyers and businesses brace for the financial impact of this escalation in trade tensions.

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