Trump's Tariffs Are Costing American Jobs and Raising Car Prices, Not Sparking a Manufacturing Revival

President Trump celebrated Toyota's announcement of a $3.6 billion investment to add a second assembly line at its San Antonio facility — producing Tacoma trucks and creating 2,000 jobs — as proof that his tariff agenda is working. But Toyota's own press release made no mention of Trump or his tariffs, instead citing Texas's pro-business climate and the flexibility offered by advanced manufacturing technologies. The shift of Tacoma production from Mexico to Texas may simply reflect standard business planning rather than a tariff-driven reshoring.

The broader tariff picture tells a far less flattering story. The U.S. has shed roughly 75,000 manufacturing jobs since January 2025, including 25,900 in motor vehicles and parts. Section 232 national security tariffs on autos and parts have cost $35.2 billion through April 2026, with steel and aluminum tariffs adding another $17.5 billion, per U.S. government data. Despite administration claims that foreign exporters absorb these costs, the evidence points squarely at American companies, workers, and consumers bearing the burden.

The auto sector has been hit especially hard. Anderson Economic Group calculated that tariffs on Canadian and Mexican goods alone added roughly $1,600 to the cost of every U.S.-assembled vehicle. A Cox Automotive analysis found that tariffs drove a 10.4% jump in average new-car sticker prices — pushing imported vehicles up by $5,000 to $8,900 and U.S.-made models up by $1,600 to $2,000. GM increased destination fees on its Chevrolet Silverado by 40%, about $800 per truck. Auto dealers, most of them small businesses, absorbed 4.5% of manufacturers' price increases while still shedding 6,100 jobs since Trump took office.

The ripple effects extend beyond showroom floors. New vehicle sales averaged 15.9 million units in the first half of 2026, well below the 17–18 million annual pace seen in the five years before the pandemic. Automakers have pulled entry-level models from the U.S. market because tariff costs make them economically unviable, leaving younger and middle-class buyers without affordable options. Many Americans are holding onto aging vehicles longer and paying more for repairs. Meanwhile, foreign retaliation has damaged U.S. agriculture and dampened demand for farm and semi-truck equipment. Persistent uncertainty over the future of the U.S.-Mexico-Canada trade agreement is also freezing investment decisions, since businesses cannot project what tariff rules will look like even in the near term.