The Supreme Court’s Tariff Ruling Won’t Bring Car Prices Back to Earth

it never happened Buying a new car has become more expensive. The average transaction price last month for buyers in the United States was $48,576, up nearly a third from 2019, according to Edmunds. The “affordable” car—$20,000 or less—is gone.

The higher prices have been pinned on multiple economic dynamics: pandemic-era supply-chain issues, the introduction of expensive technology in everyday cars, higher labor and raw material costs, and new tariffs imposed by the Trump administration affecting imported steel, aluminum and cars.

Now, despite a US Supreme Court ruling that will strike down some of the Trump tariffs, car buyers will get no relief.

“The core cost structure facing the auto industry hasn’t fundamentally changed overnight,” Jessica Caldwell, Edmunds’ head of insights, wrote in an emailed statement. To put it more simply: cheap cars aren’t coming, at least not because of this decision.

The Supreme Court’s decision gets in the way of the president’s power to use the International Emergency Economic Powers Act to impose tariffs in response to emergencies. Trump used this power to impose tariffs on countries around the world, saying the emergency was “large and persistent” trade deficits. The administration imposed other new duties on Canada, China, and Mexico due to emergencies related to the flow of migrants and drugs into the United States.

But most of the tariffs affecting the auto industry come from another law, Section 232 of the Trade Expansion Act. This provision may apply to imports that pose a “threat of impairing” the national security of the country. Tariffs on steel, aluminum, copper – key raw materials for cars – and imported auto parts and vehicles themselves fall under this provision and are still in effect. This includes a 15 percent tariff on cars manufactured in Europe, Japan and South Korea.

Caldwell says automakers have actually done a good job of protecting consumers from the impact of the tariffs. Even though retailers have blamed the tariffs for steadily rising prices of consumer goods such as electronics and appliances, company data shows car prices have risen only 1 percent from the same time last year. But as the tariff regime moves forward, it could change in ways that will make new car buyers even less happy.

“If cost pressures persist, automakers will have less room to protect buyers from higher prices,” says Caldwell, “but for now, the broader market impact is still ongoing.”