Car Tariffs and the Exotic Market: What Actually Happened

This page was originally published on 24 March 2025, ten days before the American car tariffs actually took effect. It guessed. It guessed reasonably — a 10 to 30% band, prices passed to buyers, demand shifting to used and domestic cars — but it was still a guess, written before anyone knew what the car tariffs would actually be — the rate, the exemptions or how manufacturers would react.

We now know all three. Eighteen months on, the policy has a rate, four negotiated exceptions, a Supreme Court decision that people routinely misread as having cancelled it, and a real record of what it did to exotic car prices. Here is the actual state of car tariffs, and what it means if you are buying.

Quick Answer: What Are the Car Tariffs Now?

The United States charges a 25% Section 232 tariff on imported passenger vehicles, in force since 3 April 2025, with auto parts covered from 3 May 2025. Four trading partners have since negotiated caps: the EU, Japan and South Korea are capped at 15% combined duty, and the UK gets 10% on the first 100,000 vehicles a year before reverting to 27.5%. That means a Ferrari or a Porsche faces 15%, a McLaren or an Aston Martin 10%, and a Corvette none of it. The Supreme Court’s February 2026 ruling struck down a different set of tariffs and left these untouched. Vehicles 25 years or older are excluded entirely.

What the Car Tariffs Actually Are

The car tariffs are a Section 232 measure, imposed under the Trade Expansion Act of 1962 on national security grounds. That statutory detail sounds like trivia and is the single most important thing on this page, for reasons that become clear further down.

• 25% on imported passenger vehicles, effective 3 April 2025. Cars, SUVs, minivans and light trucks.
• 25% on covered auto parts, effective 3 May 2025, with a formal process for adding parts to the covered list over time.
• Vehicles 25 years or older are excluded, which is why the classic market was left alone.
• USMCA-qualifying vehicles from Canada and Mexico are tariffed only on their non-US content, not on the whole vehicle.
• An import adjustment offset exists for manufacturers assembling in the United States — 3.75% of a vehicle’s value against parts duties from April 2025, stepping down to 2.5% from May 2026.

One correction to the original version of this article, which used a Ferrari at $300,000 becoming $375,000 as its worked example. Car tariffs are assessed on the customs value declared at the port — broadly what the importer pays — not on the retail sticker. The duty on a $300,000 car is not $75,000 on the showroom price, and the manufacturer decides how much of it reaches you. That is why the actual price rises turned out smaller than the headline rate.

Car Tariffs Depend Entirely on Where the Car Was Built

This is where the original article’s “10–30% on European luxury cars” has been replaced by something you can actually look up. Four trading partners negotiated caps on car tariffs during 2025, so the car tariffs a given exotic faces now depend on its country of manufacture — not on the badge, and not on who owns the brand.

Two consequences are worth drawing out. First, Bentley and Rolls-Royce are German-owned but British-built, so they get the UK rate rather than the EU one — origin is where the car is made, not where the parent company is headquartered. Second, the UK’s 10% is the best deal any exporter got, which is a meaningful structural advantage for McLaren and Aston Martin against their Italian and German rivals for as long as the quota holds.

That quota is the thing to watch. One hundred thousand vehicles a year covers British exports comfortably today, but it is shared across every UK-built car sold into the United States — the volume marques consume most of it, and the low-volume exotic builders are the ones who would feel it if it ran out.

No, the Supreme Court Did Not Cancel These

On 20 February 2026 the Supreme Court held, 6–3, that the International Emergency Economic Powers Act does not give a president the power to impose tariffs — the power to tax imports belongs to Congress. It was a major decision and it was widely reported as the end of the tariffs.

It was not the end of these ones. The IEEPA tariffs and the car tariffs come from different statutes, and only the IEEPA ones were before the Court. Section 232 duties — steel, aluminium and automobiles — were unaffected, as were Section 301 tariffs. The 25% on imported cars, and the negotiated caps that sit under it, all survived intact.

This distinction matters commercially, not just legally, because car tariffs are still being charged. We have had buyers ask whether the ruling means the duty on a car already ordered comes off. It does not. If someone tells you car tariffs were struck down, they have read a headline about a different tariff.

What Car Tariffs Actually Did to Prices

Ferrari moved first and moved publicly, which makes it the cleanest case study available. On 27 March 2025, days after the tariff was announced and before it took effect, the company said it would raise US prices by up to 10% on most models from 2 April 2025 — an increase of roughly $25,000 to $350,000 depending on the car. The 296, the SF90 and the Roma were left unchanged.

Read those numbers against the headline car tariffs rate and the whole economics of this becomes visible. The tariff was 25%. Ferrari passed on up to 10%, exempted three model lines entirely, and told investors to expect a 50 basis point hit to its 2025 margin — from a guided 28.5%, which was still above the 28.3% it delivered in 2024. In other words the manufacturer absorbed a large share, took a small profitability hit, and remained extremely profitable.

It could afford to. The United States is Ferrari’s single largest market at roughly a quarter of sales — 3,452 cars in 2024, its fastest-growing region. A brand with a multi-year waiting list and pricing power does not respond to car tariffs the way a volume manufacturer does. That asymmetry is the real story of car tariffs at this end of the market, and the original version of this article missed it by assuming full pass-through.

Car Tariffs: The Details Most Coverage Skips

• The caps are combined, not additional. The 15% figure for EU, Japanese and Korean cars is the total duty including the 2.5% most-favoured-nation rate that already existed — not 15% on top of it.
• USMCA vehicles are taxed on content, not on the car. A qualifying vehicle built in Mexico or Canada is dutied only on the value of its non-US content, which is a far softer treatment than a flat rate and a large part of why North American production held up.
• The US assembly offset steps down. Manufacturers building in America can offset 3.75% of a vehicle’s value against parts duties, but that drops to 2.5% from May 2026 and continues declining — a deliberate taper rather than a permanent subsidy.
• The parts list grows. There is a formal inclusions process through which additional components get added to the covered list, so the parts side of this tightens over time even when the headline vehicle rate does not move.
• Twenty-five years is the cliff edge. A vehicle 25 years or older is outside the tariff entirely.

Car Tariffs Made the Used Market the Quiet Winner

The original article predicted buyers would shift toward pre-owned cars, and that is the one forecast it got straightforwardly right. A car already in the United States has already cleared customs. Whatever duty it attracted was paid by somebody else, at some earlier point, and car tariffs do not attach again when the car changes hands.

That is a real structural advantage and it is worth understanding precisely: car tariffs raise the cost of bringing a new car in, which lifts the replacement cost of the equivalent used one. It does not make used cars cheap. It makes them relatively better value against a new car whose price has moved, and it is one of several reasons the domestic used exotic market has been firm. Our analysis of which exotic car values are actually appreciating separates that effect from wishful thinking, floor prices included.

The 25-year exclusion is the other piece. Anything built in 2001 or earlier can be imported without the tariff at all, which leaves the classic and modern-classic import market outside car tariffs entirely and operating exactly as it did before — a point worth knowing if the car you want was never sold new in the States.

How the Car Tariffs Got Here: A Timeline

Eighteen months, one base rate, four negotiated caps and a Supreme Court decision. Laid out in order, the sequence explains a lot of the confusion around car tariffs — including why so much of the coverage you can still find online describes a position that no longer applies.

What Car Tariffs Mean If You Are Buying

• Ask where the car was built, not where the brand is from. It is the only fact that determines which of the car tariffs applies. A US-assembled German SUV and an Italian-built German-owned supercar are treated completely differently.
• Do not assume the sticker moved by the tariff rate. Manufacturers absorbed varying shares and exempted specific model lines. Compare the actual current MSRP against the pre-April-2025 one rather than doing the arithmetic yourself.
• Check when the car landed. Cars imported before the relevant date, or before a cap was negotiated, entered under different economics. That does not entitle you to a discount, but it explains inventory priced oddly against current stock.
• For a used car already in the country, the tariff is not your problem. It is priced into the market around you, but there is no duty event when you buy.
• If you are importing privately, get customs advice before you commit. The rate, the 25-year rule and the parts position all turn on details that are worth an hour of a specialist’s time against a six-figure purchase.
• Assume this changes again. The rate has moved for four trading partners inside eighteen months and a Supreme Court decision reshaped the wider landscape. Any car tariffs figure, on this page or anywhere else, is a snapshot.

This is general information, not customs, legal or tax advice. Tariff classifications and rates change, and your specific transaction may turn on details this page does not cover. Take professional advice before importing.

Where We Land

Our family has been in the car business for more than a century, which means we have watched a lot of policy arrive, get predicted badly, and then settle into something more mundane than anyone expected, and car tariffs have followed that pattern. That is roughly what happened here. The car tariffs are real, they are meaningful, and they did not do what the March 2025 version of this page thought they would.

We have rewritten it rather than deleted it, because a page that shows what was predicted against what happened is more useful than one that quietly pretends it always knew. The same test applied to the manufacturing side — every automaker that promised to build more cars in America, scored against what actually got built — is in our US auto production scorecard. Cars we already have in the country are the simplest way around all of this — browse the inventory or list your car with us. If you are new to this end of the market, our first-time exotic car buyer’s guide and our financing and insurance guide are the next things to read, and Exotic Car News follows trade policy as it moves.