Tariff Update: New-Car Prices, May 2026

Six weeks ago the 15% import tariff on Japanese, Korean, and European vehicles took effect, and the fear I heard from every buyer was the same: sticker prices jumping $3,000–$5,000 overnight. It hasn't fully played out that way, and I want to show you what actually happened so you can shop with real numbers instead of headlines.

Who absorbed the tariff

Most automakers moved fast to eat at least part of the tariff rather than pass it straight through. The logic is simple — a sharp price hike on already-expensive cars tanks transaction volume, which hurts the business more than a margin dent.

Toyota and Honda are the most exposed. Both build the bulk of their high-volume crossovers and sedans in Japan, with some US final assembly. Toyota absorbed the tariff on the Camry (built in Georgetown, KY), but Japan-built RAV4 versions are subject to it. Honda's US-built Pilot and Ridgeline are unaffected; the CR-V, split between Canada and Indiana, has more complicated exposure.

Hyundai and Kia are the quiet winners thanks to their Georgia campus. The IONIQ 5, EV6, and most high-volume crossovers from both brands are assembled domestically, sidestepping the tariff entirely — and that's handed them a real pricing edge in May.

European brands mostly passed it through. BMW, Mercedes, and Audi models built in Europe have seen MSRP increases of class="relative z-10",500–$3,000. The exception is BMW's Spartanburg, SC plant, which builds the X3, X4, X5, X6, X7, and XM here.

Where prices actually moved

Vehicle (imported build)	Pre-tariff MSRP	Current MSRP	Change
Toyota RAV4 (Japan build)	$29,900	$30,900	+ class="relative z-10",000 (partial absorption)
BMW 3 Series	$44,900	$47,200	+$2,300
Mercedes C-Class	$46,900	$49,400	+$2,500
Audi A4	$44,500	$47,000	+$2,500
Volvo XC60	$47,900	$50,600	+$2,700
Honda CR-V (Ohio build)	$32,800	$32,800	No change

Inventory dynamics

The tariff created an inventory split I find genuinely useful as a shopper. Domestically assembled vehicles — full-size trucks (F-150, Silverado, Ram 1500), the Ohio CR-V, the Kentucky Camry, most Hyundai/Kia crossovers — are drawing down faster as buyers flock to unaffected stock. Imported vehicles, especially luxury, are sitting longer.

And sitting inventory is where the opportunity hides. Mercedes and BMW dealers, watching their tariff-affected cars turn slowly, are more flexible on price than they've been in two years. If you want a German luxury car and you'll pay the higher sticker, there's negotiating room now that simply didn't exist six months ago.

What to expect through summer

The tariff is under review with no reversal announced as of publication. Manufacturers are operating as if it's permanent while lobbying for targeted exemptions. Through summer, here's my read:

• Domestically built inventory keeps moving fast with minimal discount
• Imported luxury develops more dealer discount as turns slow
• Japanese/Korean mainstream imports stay in mild absorption, with some brands likely passing more cost through in Q3 refreshed pricing

For buyers: the tariff's most immediate gift is at the luxury level, where dealer motivation on European cars has jumped. For everyone else, domestically assembled vehicles are the value play right now. See automaker tariff refund programs for the brands running customer-facing tariff compensation.