Tariffs could make cars more expensive, MN Commerce Dept. warns
Trump declares 25% tariff on foreign-made cars [RAW]
President Donald Trump on Wednesday announced a 25 percent tariff on any auto makers who don't have a facility in the United States. The tariff will go into effect on April 2.
ST. PAUL, Minn. (FOX 9) - Impending tariffs are expected to raise the cost of purchasing a vehicle, as well as repairs and insurance premiums, according to officials with the Minnesota Commerce Department.
Increasing vehicle costs
Big picture view:
A news release from the Minnesota Department of Commerce said tariffs on automotive parts from Canada, Mexico and China are set to go into effect in April 2025.
Data from the American Property Casualty Insurance Association (APCIA) shows that nearly 60% of auto replacement parts come from these countries.
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This will also result in higher auto insurance premiums and repair costs, according to factors cited by the Insurance Federation of Minnesota.
The APCIA adds that as auto insurance correlates with vehicle prices, insuring a car could become more expensive if insurance companies face higher claim payouts because of increased repair and replacement costs.
The Minnesota Department of Commerces said consumers could face higher premiums when they renew their policies, which typically happens every six to 12 months.
What they're saying:
Minnesota Department of Commerce Commissioner Grace Arnold released a statement saying, "U.S. tariffs, whether enacted or threatened, could increase the cost of maintaining and insuring your car. This is a man-made crisis that will make it more expensive for everyday Minnesotans to drive."
Arnold continued by saying, "Minnesota’s auto insurance market is competitive, allowing consumers to shop for lower premiums. However, insurance markets depend on stability and predictability to offer consumers comprehensive insurance at affordable prices. These tariffs will likely make it more expensive for Minnesotans to get to work, take their kids to childcare, and drive across our state."
What you can do:
State officials say residents should stay informed about the developments and review their insurance policies. Minnesotans should also consider how possible increases in vehicle prices and insurance could impact their personal budgets.
The Source: Information for this article came from a news release sent by the Minnesota Department of Commerce based on information from the Insurance Federation of Minnesota and the American Property Casualty Insurance Association.