Chicago — For 70 years, Steve Walter’s family has been in the business of car repairs on Chicago’s North Side.
“I am the fourth generation,” Walter mentioned. “My grandfather specialized in pre-war Italian racing cars.”
Walter’s mechanics tend to replace metal rather than repair it, and he is preparing for the effects of President Trump’s recently announced 25% tariffs on all imported vehicles and auto parts entering the U.S., scheduled to take effect on April 2.
“These tariffs are going to raise the average cost of repairs,” Walter noted.
He is also convinced that the tariffs will lead to an increase in auto insurance rates.
“They are bound to rise,” he stated.
The president’s 25% tariffs on all steel and aluminum imports were implemented earlier this month, but Mr. Trump granted automakers a one-month exemption following discussions with the leaders of the Big Three: Ford, General Motors, and Stellantis. In early March, Mr. Trump also introduced and then paused until April 2, the 25% tariffs on imports from Mexico and Canada that fall under a 2020 trade agreement.
Last year, the average repair cost for a five-year-old vehicle was estimated between $5,073 and $6,274 according to CCC Intelligent Solutions, and Walter anticipates this figure to climb.
Walter showcased a fender to CBS News that costs around $200. He predicts that with the tariffs, “in six months to a year, this fender could be priced at $250.”
Almost all replacement parts stored at Fred Billeh’s Discount Auto Warehouse in Chicago come from countries subjected to the new tariffs. He estimates his warehouse holds “millions” of parts.
Billeh saw price increases in 2019 after Mr. Trump implemented tariffs during his first term. He mentioned that the additional costs are ultimately passed “on to the customers, to the consumer.”
The Insurance Information Institute had already projected an increase in premiums this year of around 7%, and that was prior to the announcement of the new tariffs.
Bob Passmore, vice president of the American Property Casualty Insurance Association, which represents insurance companies, expressed that the effects of the tariffs will create a “ripple” effect, with impacts from today being noticed in 12 to 18 months.
“If costs increase here, it will eventually reflect in your premium bill,” Passmore explained. “…It’s quite straightforward.”
