July 24, 2026 is a real date. Section 122 tariffs expire then. Car prices won't drop. Those two facts aren't in conflict — they're connected.
The tariff actually responsible for raising new car prices is Section 232, a 25% duty on imported vehicles that's been in effect since April 3, 2025. It isn't the one expiring in July. It isn't the one the Supreme Court struck down in February. And it isn't the one being replaced by the forced-labor tariff regime the Trump administration proposed on June 2. Every headline about tariffs expiring refers to a different legal authority. Section 232 has no sunset date.
Three Tariff Authorities, One Car Market
Three separate tariff frameworks have been in play since 2025. They cover overlapping goods, operate on different legal foundations, and — critically — don't stack on automobiles.
Section 232 is the one that matters for car prices. Authorized under the Trade Expansion Act of 1962, it's what the Trump administration used to impose 25% tariffs on imported passenger vehicles and auto parts, effective April 3, 2025. No expiration date. Section 232 is structural authority, not emergency authority. Removing it requires an act of Congress.
Section 122 is the one expiring July 24. After the Supreme Court struck down IEEPA tariffs on February 20, 2026, the administration invoked Section 122 to impose a 10% global tariff as a stopgap. Section 122 caps out at 15% and 150 days. That clock started February 24. But Section 122 and Section 232 don't stack: under U.S. Customs guidance, goods already subject to Section 232 — including automobiles and auto parts — are exempt from the Section 122 surcharge. Cars were never in the 10% bucket.
Section 301 is what comes next. On June 2, 2026, USTR proposed new tariffs on 60-plus trading partners under Section 301, targeting forced-labor practices. Rates run 10-12.5%. The timeline is designed to take effect the moment Section 122 expires. Automobiles are in the exemption Annex here too. Goods already subject to Section 232 tariffs are explicitly carved out.
| Tariff Authority | Rate | Applies to Cars? | Expiration |
|---|---|---|---|
| Section 232 | 25% on imported vehicles | Yes | None |
| Section 122 | 10% global surcharge | No (Section 232 takes precedence) | July 24, 2026 |
| Section 301 (proposed) | 10-12.5% on 60+ countries | No (Section 232 exempt) | No sunset |
What Section 232 Actually Costs
Section 232 applies to the vehicle's customs value, the declared import price before dealer markup. On a $35,000 vehicle imported from Japan, that's a $8,750 duty passed up the supply chain. On a $45,000 German vehicle, roughly $11,250. Per KBB's April 2026 analysis, imported models are running $5,000 to $8,900 above year-prior pricing specifically because of tariff pass-through. Domestic models — those built in the United States — are up roughly $2,000, driven by higher parts costs rather than vehicle-level tariffs.
USMCA-qualifying vehicles are the major exception. Passenger vehicles assembled in Canada or Mexico with 75% North American content (including 40% high-wage content) owe 0% under Section 232. A Toyota RAV4 built in Ontario qualifies. A Honda CR-V from Ontario qualifies. A Camry from Georgetown, Kentucky qualifies. A Mercedes GLE assembled in Germany pays the full 25%.
That origin split is why the same brand, sometimes the same model, can carry dramatically different tariff exposure. Assembly location has never mattered more to the sticker price than it does right now.
The Downstream Effect on Used Cars
Higher new car prices push buyers who planned to go new into the used market. Per Edmunds data from April 2026, 58% of in-market shoppers say they're more interested in used vehicles because of tariffs. More buyers chasing the same used supply drives prices up. The average used vehicle now lists at $30,166 per JD Power, up $860 from a year ago. The Manheim Used Vehicle Value Index hit a three-year high in Q1 2026, up 6.2% year over year.
That dynamic doesn't reset on July 24. The underlying driver, elevated new car prices from Section 232, stays in place regardless of what happens to Section 122.
The Waiting Math
Buyers expecting July to bring a tariff-driven price correction won't find one. Section 232, the tariff that matters for vehicle costs, has no expiration window and no pending legislative challenge. The June 2 Section 301 proposal reinforces this: even as the administration builds a new tariff framework to replace Section 122, it deliberately excluded automobiles because they're already covered at a higher rate.
If you're buying a vehicle assembled in Canada or Mexico with qualifying North American content, you're already in the USMCA carve-out. For Japanese, German, South Korean, or British-market vehicles, the 25% rate is the baseline for the foreseeable future. Origin is the variable that matters most, not the tariff expiration calendar.
CarScout tracks current asking prices across makes and models so you can see what dealers are actually charging relative to the market. If your target vehicle is a high-tariff import, the data tends to show where dealers are sitting on inventory and have room to move. Browse current market data to see where prices stand on the models you're watching.
Frequently Asked Questions
Will car prices drop when Section 122 tariffs expire July 24? No. Section 122 tariffs were never applied to automobiles because Section 232 (25% on imported vehicles) already covers them and they don't stack. The July 24 expiration is real, but it carries no effect on vehicle pricing. Section 232, the tariff driving new car price increases since April 2025, has no expiration date.
What tariff actually applies to cars sold in the US? Section 232, under the Trade Expansion Act of 1962. It imposes a 25% duty on imported passenger vehicles. USMCA-qualifying vehicles assembled in Canada or Mexico with sufficient North American content are exempt. Everything else, including vehicles from Japan, Germany, South Korea, and the UK, faces the full 25% rate applied to the customs value before dealer markup.
Could the new Section 301 forced-labor tariffs change car prices? No. The June 2, 2026 USTR proposal explicitly exempts goods already subject to Section 232, which includes automobiles and auto parts. If Section 301 is finalized as proposed, it replaces Section 122 for other product categories but adds nothing to vehicle tariffs.