Business
Auto Tariffs Take Effect, Putting Pressure on New Car Prices
Tariffs on imported vehicles took effect Thursday, a policy that President Trump said would spur investments and jobs in the United States but that analysts say will raise new car prices by thousands of dollars.
The 25 percent duty applies to all cars assembled outside the United States. Starting May 3, the tariff will also apply to imported auto parts, which will add to the cost of cars assembled domestically as well as auto repairs.
There will be a partial exemption for cars made in Mexico or Canada that meet the terms of free trade agreements with those countries. Carmakers will not have to pay duties on parts like engines, transmissions or batteries that were made in the United States and later installed in cars in Mexican or Canadian factories.
That provision will reduce the impact on vehicles like the Chevrolet Equinox electric vehicle, which is assembled in Mexico but includes a battery pack and other components made in the United States. General Motors will pay a tariff only on the portion of the car made abroad.
At the same time, the duty on parts will raise the cost of cars made in Michigan, Tennessee, Ohio or other states. That is because most cars rolling out of U.S. factories contain components made abroad, often amounting to more than half the cost of the vehicle.
About 90 percent of the value of some Mercedes-Benz cars made in Alabama, for example, is in engines and transmissions that are imported from Europe, according to data compiled by the National Highway Traffic Safety Administration.
The impact of the tariffs on individual vehicles will vary widely. Cars like the Tesla Model Y, made in Texas and California, or Honda Passport, made in Alabama, have high percentages of U.S.-made parts and will pay lower tariffs.
Tariffs will be highest on cars manufactured abroad, like the Toyota Prius made in Japan or Porsche sports cars made in Germany.
Even people who don’t buy new cars will be hit by the tariffs because they will pay more for parts like tires, brake pads and oil filters.
Michael Holmes, co-chief executive of Virginia Tire and Auto, a chain of auto repair and maintenance shops, said he and his suppliers would initially try to absorb most of the increased cost.
“That’s not sustainable,” Mr. Holmes said. “It’s magical thinking to think businesses won’t pass this on.”
The auto tariffs could also push up prices for used cars over time, analysts said, by increasing demand for those vehicles as new ones become unaffordable for many buyers. Insurance premiums may also rise because repairs will cost more.
Wide-shouldered and lanky, Chizi makes a dramatic impression. A few days before the show, he shaved his famous dreadlocks. But when he walked onstage in an oversize white T-shirt, a pair of black pants, and white and red Nike sneakers, the nerves were still visible. He forgot a few lines. He paused awkwardly a couple of times. Later, on social media, he would offer an apology for what he considered his poor performance. “I could do better,” he wrote. The audience didn’t seem to mind. The people chuckled, laughed and applauded.
He riffed mostly about his childhood — teachers who humiliated him for disrupting class, a mother who loved and hit him, being an outlier in a country that didn’t tolerate curiosity and individuality. The material was personal, even tender at moments. Political references were sprinkled throughout, but they were subtle.
Then, near the end of the set, he referred to Mr. Xi, China’s paramount leader, obliquely as “the husband of Peng Liyuan,” the folk singer who was once far more famous than her husband. Several women in front of me who had been laughing and clapping went suddenly still. Talking about Mr. Xi in an unfavorable fashion is the ultimate taboo in China. Reducing him to his domestic relationship in a public event was shocking.
After the show, we sat down to talk. He chose his words carefully. When I relayed a friend’s criticism — similar to others’ online — that he seemed to have pulled his punches on Xi Jinping, he laughed. “It’s not meant to satisfy you,” he said. The choice he made onstage was deliberate.
Free speech is a tool, he told me. The temptation is to use it simply because you can. “It’s exhilarating,” he said. But that, he added, can be a trap, and chasing approval is its own form of corruption, as dangerous to comedy as censorship itself.
Everyone wants to be “The Devil Wears Prada 2,” as the 20-year sequel strutted to an estimated $77 million in the U.S. and Canada in its opening weekend, highlighting the spending power of women moviegoers at the box office.
The film, which returned stars Meryl Streep, Anne Hathaway, Emily Blunt and Stanley Tucci, nudged out Lionsgate’s “Michael” for the domestic top spot at theaters this weekend. In its second outing, the Michael Jackson biopic brought in $54 million, upping its overall North American total to $183.8 million and its cumulative global haul to $423.9 million.
Worldwide, Walt Disney Co.-owned 20th Century Studios’ “The Devil Wears Prada 2” brought in $233.6 million, according to studio estimates. The theatrical revenue, both domestic and worldwide, edged studio expectations. Already, the film has brought in 72% of the total revenue that the original movie made ($326 million).
The 2006 original has become a cult classic, with lines like Streep’s infamous “that’s all” and Tucci’s “gird your loins” now millennial catchphrases. The popularity of that film has continued over time with repeat viewings on cable television and the Disney+ streaming service.
“Nostalgia is a big driving factor for movies like this,” Andrew Cripps, head of theatrical distribution for Walt Disney Studios, said. “It’s just one of those movies that got into the zeitgeist.”
The fashion-forward sequel had a production budget of about $100 million. The film notched a 77% approval rating on aggregator Rotten Tomatoes.
Women comprised the majority of the audience for “The Devil Wears Prada 2” this weekend, representing 71% of moviegoers, according to data from EntTelligence.
The strong showing for “The Devil Wears Prada 2” highlights the spending potential of female moviegoers, who have had few big movies aimed at them in the last few years.
Despite the billion-dollar blockbuster that was “Barbie” in 2023, Hollywood has largely failed to consistently deliver big films targeted to women. That’s led multiple box office analysts and studio executives to note that the industry is leaving money on the table.
In the past, comparable titles to “The Devil Wears Prada 2” would have been 2008’s “Mamma Mia” or the “Sex in the City” film, but those kinds of movies are now few and far between.
More recent female-focused fare includes last year’s “Wicked: For Good” and Taylor Swift’s “The Official Release Party of a Showgirl,” though “Wicked” has the benefit of also having a longtime Broadway fanbase.
“There haven’t been enough movies for females,” Cripps said. “When you can give them a good movie, as long as the movie plays well and I think this one plays brilliantly, there’s a big audience out there.”
Universal Pictures, Nintendo and Illumination’s “The Super Mario Galaxy Movie” continued its run with a third place finish of $12.1 million at the box office this weekend, followed by Amazon MGM Studios’ “Project Hail Mary” in fourth and Neon’s horror flick “Hokum” in fifth, according to Comscore data.
Spirit Airlines was once a potent force in the U.S. aviation industry. Its demise will reveal how strong that influence had been in recent years when air travel had already begun moving away from the low-fare model that Spirit pioneered.
The airline’s shutdown on Saturday after years of financial troubles resulted in the loss of 17,000 part-time and full-time jobs, and disrupted the plans of tens of thousands of travelers. But aviation experts say it is not entirely clear whether Spirit’s absence will have a significant, long-term impact on the industry, travelers or the U.S. economy.
Airlines will probably have an easier time raising fares and many will absorb Spirit’s gates, check-in counters and other assets at airports in the New York area, Las Vegas, Ft. Lauderdale and elsewhere. But the effect may not be huge, aviation experts said, because Spirit had shrunk a lot recently and was in its second bankruptcy in two years.
“By the time the plug was pulled, Spirit was no longer a major player,” said Michael Boyd, an aviation consultant with the Boyd Group International. “Half the fleet was parked and sold off.”
In May 2024, the airline operated 3.4 percent of all domestic flights, according to Cirium, an aviation data firm. It filed for bankruptcy later that year and again in 2025. Before it shut down, Spirit’s schedule for May would have amounted to just 1.1 percent of domestic flights.
The airline’s diminished business was a major reason many analysts and economists were befuddled by the Trump administration’s efforts to save Spirit, which ultimately went nowhere because the government and the airline’s creditors could not reach a deal.
Most airlines are temporarily offering discounted fares to Spirit’s customers. But many experts believe the company’s absence will result in somewhat higher fares over time, though how much prices will rise is hard to predict.
Spirit’s presence at an airport helped keep fares down, a phenomenon that was studied by economists and earned the name the “Spirit effect.” Even in its reduced state, the company played an important role in forcing other airlines to keep fares low, some experts said.
“It’s at the low-fare end of the spectrum where the market price is established,” said Robert Mann, an aviation industry consultant and a former airline executive. “And it’ll make it easier for everyone else to raise prices at that level.”
But some aviation experts said the consequence may be overstated. Other airlines have spare seats and can absorb many of the customers Spirit catered to. And many people who flew on Spirit tended to travel only when they found very low fares, so they may simply choose not to fly as often now.
Fares would most likely have risen with or without Spirit, some analysts said. Airlines started raising prices in March to make up for the higher fuel costs caused by the Iran war and many have warned further increases are coming.
“It is the industry that is the big winner as unprofitable domestic capacity is further reduced,” William Swelbar, an aviation consultant and economist, wrote in an email. “Fares have to increase or we will lose more airlines to bankruptcy/consolidation.”
Spirit’s slow decline in recent years had broadly helped other airlines, most notably larger carriers like American Airlines, Delta Air Lines, Southwest Airlines and United Airlines. The cities where Spirit flew most included Atlanta, Los Angeles, Detroit, Dallas, Houston, Newark and Miami.Those urban areas are home to important airports for those large airlines.
Those carriers had already found an effective way to compete against Spirit: “basic economy fares.” In the 2010s, American, Delta and United introduced these fares, which were cheaper than standard economy tickets but did not include things like the ability to pick a seat or bring multiple bags on the plane. In recent years, use of these fares has grown a lot, reducing demand for tickets from low-fare carriers like Spirit.
Some smaller airlines also stand to gain by Spirit’s absence, notably JetBlue Airways. JetBlue had already been expanding at Spirit’s home base, Fort Lauderdale-Hollywood International Airport, just north of Miami.
JetBlue said last month that it had added nonstop flights to 21 cities from Fort Lauderdale over the past year, which it views as its third big hub airport after Kennedy International in New York and Boston Logan International. On Saturday, after Spirit shut down, JetBlue said it would add flights from Ft. Lauderdale to 11 more destinations.
“It is full steam ahead in Fort Lauderdale,” Joanna Geraghty, JetBlue’s chief executive, said on a call with investors and analysts last month.
Spirit’s collapse may have a disproportionate effect on some smaller, regional airports. For example, it was the only airline flying to Arnold Palmer Regional Airport in Latrobe, Pa., which is a little more than an hour’s drive from Pittsburgh International Airport.
Spirit also accounted for nearly all flights to Atlantic City International Airport in New Jersey. But other growing budget carriers, such as Allegiant Air and Breeze Airways, which both recently started flying to Atlantic City, may well replace some of the flights smaller airports lost with Spirit’s shutdown.
Frontier Airlines, perhaps Spirit’s biggest competitor in the low-fare segment of the industry, stands to benefit, too. But it is facing many of the same challenges as Spirit did.
“The data suggests that Frontier will win because of its route overlap with Spirit,” Mr. Swelbar said. “But that overlap is also filled with basic economy seats.”
Spirit may help other airlines in another way. Its demise has suddenly made thousands of experienced airline workers available, including more than 2,000 pilots and hundreds of mechanics. United Airlines this weekend began an effort to recruit Spirit employees, saying it would pay special attention to their applications. Demand for pilots, mechanics and other professionals has been high for years.
But Spirit’s assets — planes, airport gates and other real estate, including at LaGuardia Airport in New York — won’t become available immediately. Many of those assets were used as collateral for Spirit’s loans, meaning they will be distributed through bankruptcy court proceedings, which could take some time.
“It’s not going to happen by Monday,” Mr. Mann said, “or next month, or probably for several months.”
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