Tariffs Are Changing the GameTariffs from the US aren’t doing carmakers any favors. Automakers have already lost billions to these extra costs, and that pain eventually lands on buyers – right when new car prices are already flirting with record highs.Some brands, like Hyundai, have done what President Trump hoped: they’re building more cars in the US to dodge tariffs and check the box for domestic production. That approach works if you’re big enough and have the margins to absorb the extra costs.But not every automaker can play that game. For brands that depend on entry-level models to move the needle, it’s a different story. That’s exactly where Nissan is right now. Why Nissan Can’t Build Cheap Cars in the USAccording to Christian Meunier, the issue comes down to cost structure. Speaking to Bloomberg, he made it clear that building affordable models in the US simply doesn’t add up.“We couldn’t build these entry-level cars in the US at the same cost, we couldn’t do it,” Meunier said. “The problem is the margin.”For cars like the Nissan Sentra and Kicks (and Kicks Play), price is everything. These models start just above $22,000, and moving production to the US would mean higher labor and operating costs – likely pushing them out of reach for the buyers they’re meant for.Right now, Nissan builds these cars in Mexico to keep costs down. But even with that advantage, tariffs are tacking on another $2,500 to $3,000 per car – a big hit for budget models.With the average new car price creeping toward $50,000, entry-level options are already on the ropes. The Nissan Versa, now discontinued, was one of the last cars you could get for under $20,000. That says a lot about how squeezed the budget segment is. The Workaround: Tariff ReliefSince building cheap cars in the US isn’t realistic, Nissan’s answer is simple: lower the tariffs.Nissan is now pushing US officials to cut tariffs on cars built in Mexico, especially with the USMCA agreement up for review. What used to be a routine process has turned into a complicated negotiation, with trade, migration, and politics all in the mix.For Nissan, it’s not about dodging rules – it’s about keeping cars affordable. Meunier says US policymakers seem to get it, especially since high car prices are already a hot topic.Whether or not tariff relief actually happens is still up in the air. For now, though, the math is simple: Nissan can’t build cheap cars in America, and unless something changes on the policy front, affordable models will keep coming from outside the US.
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