2 possible changes to American car prices in the next 4 years under Trump

Many aspects of the American economy are expected to change following the election of former (and now incoming) President Donald Trump. His campaign promises of tariffs, deregulation and tax cuts are likely to impact almost every aspect of the American financial system. One area that will certainly be affected is the American automotive industry.

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Here are the economic changes that will most likely be the determining factors in American car prices over the next four years:

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Anyone who reads about Trump’s economic policies (as well as predictions about how those policies will affect the economy) is by now familiar with tariffs – these are the taxes the government imposes on foreign imports coming into the country. As he did in his previous term, Trump has vowed to impose steep tariffs on cars made in Mexico and auto parts made abroad.

Trump has claimed that this will put pressure on car companies to move their production centers to America. But critics have argued that tariffs — although they could boost American production — are also likely to raise auto prices. Tariffs will force importers to raise their car prices, which will then force American car brands to raise their prices.

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Throughout his presidential campaign, Trump argued that the automotive industry’s transition to electric vehicles (EVs) should be driven by the private sector, not the federal government, according to Forbes. Therefore, as president, he “could consider cutting or redirecting funding for the National Electric Vehicle Infrastructure (NEVI) program and argue that the federal government should not fund charging networks.”

If that happens, Trump’s reduction in electric vehicle incentives would likely help electric vehicle sales from Tesla (whose shareholders include Trump supporter Elon Musk), as Tesla’s “cost base and vehicle platforms allow it to sell electric vehicles profitably, something that others may do.” “American and global OEMs will struggle to raise financing for electric vehicles and internal combustion engines.”

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This article originally appeared on GOBankingRates.com: 2 possible changes to American car prices in the next 4 years under Trump