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You’ve probably read the word “tariffs” about a million times by now. And that’s because they’re a pretty big deal. To boost domestic vehicle manufacturing, Trump imposed a 25% tariff on cars built outside the U.S. and imported for sale.

For a population that’s already struggling from inflation, it means brand new cars will likely become more expensive. Starting April 1, manufacturers will have to pay 25% of the vehicle’s price in fees to the government. Obviously, they’ll want the customer to cover as much of that fee as possible, meaning higher sticker prices.

Trump says cars built on American soil aren’t subject to tariffs. So, if you’re shopping for a brand new car after April, you should shop American.

“The message is congratulations, if you make your car in the United States, you’re going to make a lot of money. If you don’t, you’re probably going to have to come to the United States, because if you make your car in the United States, there is no tariff,” Trump told NBC.

Trump missed one detail that almost makes tariffs pointless

Several foreign manufacturers have plants in America to build cars. Subaru builds several of its vehicles in Indiana, Toyota operates plants in Texas, and Honda assembles several models in Georgia. Porsche builds some cars in Georgia, too.

However, all of those carmakers—including Ford, Chevy, Stellantis, and more—use parts built in foreign countries, which the tariffs cover. So, even if Subaru builds your Outback in Indiana, its engine, transmission, and other components come from Japan.

Therefore, even “American-made” cars are facing price increases because of the tariffs. To combat this, Trump proposed giving a tax break to those who finance a car built in the United States.

He wants you to write off the loan’s interest

In a plan that many assume is to help the middle class, Trump is working with the White House to approve a policy that would let those who finance a car built in America write the interest payments from the loan off from their federal tax return.

“We’re going to do something that has never been done in this country before, and I’m very proud to say it was my idea,” Trump said during a March 28 press conference. “If you buy a car that’s made in the United States, and you borrow money—if you have a loan—we’re going to let you deduct the interest payments from your federal tax return.”

He said deductions were usually for “rich people,” and mentioned that the middle class was finally going to see a deduction that would “pay for itself, very quickly.” However, if you’re in the habit of buying cars with cash, you obviously don’t get a break.

Since it was just a proposition, there’s a lot of information missing—like whether or not it’s only for new cars, or if used cars would fall into this policy.

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