President Donald Trump's threatened tariffs on Mexico and Canada are poised to massively jack up prices for new cars in the United States, Bloomberg reports.
In fact, Bloomberg writes that the tariffs "risk driving up US car prices by as much as $12,000, further squeezing consumers and wreaking havoc across the intricate web of automotive supply lines spanning the continent."
The report cites a new study from the Anderson Economic Group showing that electric vehicles could be particularly hard hit by the tariffs and would see their production costs increase three times more than the cost to build crossover utility vehicles.
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What's more, the tariffs could be so significant that they could shut down the production of certain car models that are assembled in part in Canada or Mexico.
“That kind of cost increase will lead directly — and I expect almost immediately — to a decline in sales of the models that have the biggest trade impacts,” Patrick Anderson, chief executive officer of Anderson Economic Group, tells Bloomberg.
Bloomberg adds that executives from America's big three auto companies -- General Motors, Ford, and Chrysler -- warned the Commerce Department last week about "dire consequences" for their industry should the tariffs go through.