President Donald Trump’s announcement that the U.S. is enacting 25% tariffs next week on all foreign-made passenger vehicles could hit Baltimore especially hard: The Port of Baltimore has been a top importer of cars for more than a decade.

Here’s what to know about the upcoming tariffs.

What Trump said

“What we’re going to be doing is a 25% tariff on all cars that are not made in the United States,” Trump told reporters Wednesday at the White House.

The new tariffs also will apply to key automobile parts (engines, transmissions, power train parts, and electrical components), according to a White House fact sheet.

When do auto tariffs go into effect?

The president said the auto tariffs would go into effect next Wednesday, April 2, 2025, and that the U.S. would beginning collecting them the following day.

The White House expects the move to raise $100 billion in revenue each year, with Trump saying it “will continue to spur growth.”

But the additional levies mean automakers could face higher costs and lower sales, with price increases being passed along to new car buyers.

Port of Baltimore impact

The Port of Baltimore has been the top importer of autos in the U.S. for more than a decade, though that No. 1 rank slipped away last year as the port recovered from the Key Bridge disaster that temporarily blocked a shipping channel.

The port moved about 750,000 cars and light trucks last year — roughly 641,000 of them imports, according to the port.

Overall last year, the U.S. imported nearly 8 million cars and light trucks worth $244 billion, according to the Associated Press, with Mexico, Japan and South Korea the top sources of foreign vehicles.

Auto sales, dealerships in Maryland

There were 216,361 new cars sold in Maryland in 2023, according to F&I Tools, an automotive resource. The state ranked 23rd for new car sales.

The most popular vehicles in Maryland are the Honda CR-V, Tesla Model Y and Toyota RAV4, according to a Car and Driver analysis of 2023 automotive registration data from Experian.

The Maryland Automobile Dealers Association, an Annapolis trade group, says it represents 300 dealership locations and their 40,000 employees.

Peter Kitzmiller, president of the auto dealers association, said in an interview Thursday that vehicle affordability has challenged car sales in recent years.

The average cost of a new car in the U.S. has risen to nearly $50,000, and Kitzmiller said a 25% tariff will only increase that.

“The math’s not good,” he said.

Thousands of dollars more on a car purchase will “price a lot of people” out of the market, Kitzmiller said.

Domestic cars aren’t immune

Free trade agreements prompted the creation of supply chains where parts and vehicles travel back and forth between the U.S., Mexico and Canada multiple times before final assembly.

Margins for the cars most people drive — Fords, Hondas and Toyotas — are much slimmer than those of luxury brands, Tinglong Dai, a supply chain expert at the Johns Hopkins Carey Business School, told The Banner recently. Complex supply chains help automakers squeeze as much juice as possible.

Tariffs could “destroy” those supply chains, Dai said. That would affect cars thought of as domestic and foreign alike.

The New York Times has an analysis pointing out the difficulty of determining which cars are really imports.

Insurance rates likely to rise

The tariffs also will make insurance rates rise. A recent report from Insurify, an online aggregator that helps people shop for policies, estimates an 8% rise in rates by the end of the year — a steeper increase than what it predicted before the proposed tariffs.

As the cost of parts and, consequently, vehicle repairs rise, insurance companies will have to retool their calculations, Don Grauel, a Baltimore-area independent insurance agent of more than 25 years, recently told The Banner.

More tariffs coming

On Wednesday, the day the auto tariffs take effect, Trump said he plans to impose what he calls “reciprocal” taxes that would match the tariffs charged by other nations.

The Trump administration’s 25% tariffs on Mexico and Canada are set to got into effect next month, when the president’s 30-day reprieve expires.

That levy included autos and vehicle parts imported through the North American trade agreement USMCA.

Importers of automobiles under USMCA “will be given the opportunity to certify their U.S. content and systems will be implemented such that the 25% tariff will only apply to the value of their non-U.S. content,” according to the White House fact sheet on auto tariffs.