Automakers warned not to raise prices due to tariffs

President Trump hosted a call with automakers in early March and warned them to not raise prices due to the tariffs according to several media reports.

Automakers warned not to raise prices

During, the call, the President “touted the tariffs would be “great,” the Wall Street Journal reports.

CEOs Mary Barra of General Motors, John Elkann of Stellantis, and Ford’s Jim Farley were on the call, the New York Times reported earlier this month.

“Trump said they should be grateful for his elimination of what he called former President Joe Biden’s electric-vehicle mandate,” the Journal said of the call.

He also “made a lengthy pitch” on the tariffs according to people on the call. This pitch included this statement of “bringing manufacturing back to the U.S. and was better for their industry than previous presidents,” they added.

The day after announcing his tariffs, the President said he plans to keep them in place until the end of his term in 2029. He thinks the tariffs will mean the “automobile business will flourish like it’s never flourished before.”

Pushback on no-price increases due to the tariffs

Auto industry experts have said repeatedly the 25% tariffs on new vehicles will be passed along to the consumers resulting in thousands more for vehicles.

Tariffs, at any level, cannot be offset or absorbed,” Ray Scott, the chief executive of supplier Lear, said in an email to staff this week seen by the Journal. “A holistic, industrywide approach will be necessary to mitigate the impact,” Scott reportedly said.

“For auto dealers and their customers, already reeling from rising vehicle and parts prices, as well as high interest rates and insurance costs, these new tariffs pose an additional and unwelcome challenge to affordability,” American International Automobile Dealers Association president and CEO Cody Lusk said in a statement.
Plus, the auto parts 25% tariff going into effect on May 3, 2025 will results in additional price increases for vehicles as well as parts you would buy from dealerships or business like AutoZone, O’Reilly, etc…

Our take

Tariffs will go into effect and prices will increase. That’s how capitalism and tariffs work.