What's the Tariff on Sedan / Car?
Imported passenger vehicles hit with 25% Section 232 tariff.
Current Tariff Rate
27.5%
Pre-2025 Rate
2.5%
Rate Increase
+25pp
Price Impact
+27%
+$7,930
Real-World Price Impact
Before Tariffs
$28,855
Toyota Camry (imported)
After Tariffs
$36,785
Toyota Camry (imported)
That's $7,930 more per unit — a 27% price increase paid by the American buyer.
Note: Price estimates assume full tariff pass-through to consumers. Actual retail prices may vary — manufacturers may absorb some costs, shift production, or adjust margins.
The Story Behind This Tariff
The 25% Section 232 auto tariff represents the most consequential trade action in the automotive sector since the 1980s voluntary export restraints on Japan. Unlike consumer electronics tariffs that primarily target China, the auto tariff hits America's closest trading partners — Japan, South Korea, Germany, and Mexico all face the same 25% rate on top of the existing 2.5% duty. Toyota, Honda, and Hyundai import roughly 30% of their US-sold sedans, with the rest assembled domestically. The tariff creates perverse incentives: a Camry made in Georgetown, Kentucky is unaffected while an identical model from Japan costs $8,000 more. This bifurcation gives domestically-assembled vehicles a massive competitive edge, but supply constraints mean domestic plants can't simply absorb all demand. Used car prices surge as new vehicle affordability collapses, creating affordability crises for lower-income Americans who depend on sedans for commuting.
📦 Supply Chain
Primary Origin
Japan
Made in USA
47%
Import Volume
$62.3B
Alternatives
Domestic assembly expansion (3-5 year timeline)
📅 Tariff Timeline
2018
Section 232 investigation initiated on autos
2.5% (MFN)2019
Tariff threat used as USMCA/Japan trade deal leverage
2.5%2025
Section 232 25% auto tariff enacted
27.5%👥 Consumer Impact
Households Affected
128M
Annual Cost Per Household
$340
💡 Did You Know?
- •The US imported 8.3 million vehicles in 2024 — more than any other product category by value
- •A 25% tariff on Japanese cars echoes the 1980s trade war that led to Toyota and Honda building US factories
- •The average new car price already hit $48,000 before tariffs — affordability was already at a 40-year low
Tariff Details
- HTS Code
- 8703.23
- Current Rate
- 27.5%
- Pre-2025 Rate
- 2.5%
- Tariff Type
- Section 232
Legal Authority
Section 232 (National Security)
Effective: Various (2018-2025)
Tariffs on imports deemed a threat to national security
The tariff on Sedan / Car is paid by the American importer at the port of entry and passed through to consumers as higher retail prices. The foreign manufacturer does not pay the tariff.
Who Actually Pays This Tariff?
Despite claims that tariffs are paid by foreign countries, the 27.5% tariff on Sedan / Car is paid by American importers — US companies that purchase these goods from abroad. The cost is then passed to American consumers through higher retail prices.
- ✓ The foreign seller receives the same price as before
- ✓ The US importer pays 27.5% of the customs value to CBP
- ✓ The retailer marks up the higher landed cost
- ✓ You pay more at the register: $28,855 → $36,785
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