Cars are deeply unaffordable for the average consumer these days, and thanks to President Trump's tariff mess, they could be about to get even more expensive. This time, though, his tariffs have nothing to do with importing or exporting vehicles. Instead, Trump is keyed in on semiconductors.
Last week he floated the idea of a 100% import duty on the crucial microchips that can be found in cars, computers, phones and pretty much anything else that has an electronic component. The only way, he says, to stop this from happening is if foreign semiconductor producers invest and build manufacturing facilities in the United States, according to The Detroit News. I know it can be hard to keep track of Trump's latest tariff shenanigans, but this one is very serious.
Every car has between 1,000 and 3,000 semiconductors in it, and if you remember, there was a massive shortage of these deeply important parts during COVID. Vehicles were delayed and shipped without features they'd normally have because there just weren't enough chips to go around. While Trump's tariffs might not lead to a supply issue, there will certainly be a cost issue if these chips were suddenly 100% more expensive than they used to be. There's very little chance the manufacturers end up eating this extra cost. In all likelihood, you're going to see these increased prices reflected on the window sticker of your next car.
Read more: Here's Every Car Company Volkswagen Owns Right Now
Why Bother Doing This?
While Trump's goal is surely to boost domestic semiconductor production, experts who spoke with the paper warned that it could have negative effects for other areas of domestic manufacturing.
"Semiconductors are such an increasingly large percentage of the value of a vehicle. So (a 100% tariff) is going to raise prices for consumers, and there's just no way around that," said Sam Abuelsamid, an auto industry veteran and vice president at communications firm Telemetry.
Hell, even if Trump gets his way and all of these chip manufacturers head stateside, it's not going to make a lick of difference for a while.
[E]ven if, manufacturers say, 'OK, we're going to move all of our chip manufacturing into the U.S.,' it still takes a long time to build chip fabs. These are not something you can build in three or six months, or even a year. It takes several years to get a chip fab up and running from scratch."
I just don't get it, Don. Are you that short-sighted? Building a semiconductor plant is no easy task, and, in any case, we're already doing it in the U.S. Do you remember the CHIPS and Science Act that was key to former President Joe Biden's economic plan? It laid out nearly $280 billion in funds to boost domestic research and semiconductor manufacturing, according to The Detroit News. It paved the way for several massive projects. However, all but one are either under construction or otherwise in development.
I know it can be confusing to keep track of everything going on with tariffs, and that's why Jalopnik has you covered. Just this week, we've told you just how much they've cost the U.S. auto industry so far and the fact that building cars here isn't going to protect these companies from feeling the wrath of tariffs. We also told you about how some companies are dealing with these massive cost increases.
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