Trump Policies Power U.S. Auto Sales to Best Year Since 2019 — Proving “Experts” Wrong (Again)

The article refers to President Trump’s 2025 Section 232 auto tariffs:

• On March 26, 2025, Trump issued a proclamation “Adjusting Imports of Automobiles and Automobile Parts Into the United States” under Section 232 of the Trade Expansion Act of 1962, ordering a 25% tariff on imported passenger vehicles, light trucks and many auto parts.
• U.S. Customs and Border Protection began collecting the 25% duty on covered imported cars and light trucks at 12:01 a.m. EDT on April 3, 2025.
• The same 25% tariff on covered automobile parts (engines, transmissions, electrical components and others listed by HTS code) was scheduled to take effect no later than May 3, 2025, with USMCA‑qualifying parts temporarily exempt until a content‑based system was in place.
• Separately, a March 26, 2025 presidential proclamation also led to 25% Section 232 tariffs on imported automobile parts effective May 3, 2025, with a June 12, 2025 Commerce Department rule setting up an “offset” program for manufacturers that assemble vehicles in the U.S. These were on top of earlier Trump‑era metals and China tariffs (e.g., 2018 steel and aluminum tariffs, and Section 301 tariffs on Chinese auto parts), but the article’s claims about 2025 auto sales center on the new, broad 25% tariffs on imported vehicles and parts.

Before the tariffs took effect in spring 2025, most independent analysts expected them to hurt sales and raise prices:

• Wall Street and industry analysts cited by CNBC warned a 25% tariff on imported vehicles and parts could be “close to the worst case outcome,” with Bank of America estimating average new‑vehicle prices (around $48,000 then) might rise by as much as $10,000 on affected models and S&P Global Mobility projecting U.S. light‑vehicle sales could fall toward 14.5–15 million annually.
• Cox Automotive and others warned tariffs would be a significant headwind for demand and earnings, and media coverage highlighted forecasts of hundreds of thousands fewer sales and sharply higher prices for entry‑level vehicles.

Data from 2025 contradicts the more dire forecasts:

• Research firm Omdia, cited by Reuters, found U.S. automakers sold 16.2 million vehicles in 2025, a 2.4% increase from 2024, meaning sales rose rather than falling by the large amounts predicted.
• Cox Automotive/Kelley Blue Book data show 2025 new‑vehicle sales around 16.3 million, about 1.8–2% above 2024 and “the best sales year since 2019,” again inconsistent with forecasts of a steep drop.
• J.D. Power data reported by Reuters indicate that while some models’ prices increased, tariffs did not “substantially affect vehicle prices” overall; the average new‑vehicle retail transaction price in December 2025 was expected at $47,104, only about 1.5% higher than a year earlier—far below predictions of double‑digit price spikes.

“One Big Beautiful Bill” is political branding for the One, Big, Beautiful Bill Act (often shortened to OBBBA or OBBB), a tax law signed by President Trump on July 4, 2025.

For auto loans, the law creates a new federal income‑tax deduction for personal car‑loan interest:

• It permanently allows eligible taxpayers to deduct up to $10,000 per year of interest paid on qualifying auto loans for new vehicles meeting made‑in‑America criteria (generally assembled in the U.S. or North America and below certain price caps).
• The deduction is taken as an itemized deduction under Internal Revenue Code section 163, with specific rules clarified in IRS guidance and Treasury regulations.
• It is limited to one or two vehicles per return (depending on filing status), excludes leasing, and phases out above certain income levels, according to non‑government summaries of the statute.

Before this law, interest on personal auto loans was generally not deductible for federal income‑tax purposes (except when the vehicle was used for business).

CAFE (Corporate Average Fuel Economy) standards are federal rules that set minimum average miles‑per‑gallon (mpg) targets that each automaker’s U.S. fleet must meet. The National Highway Traffic Safety Administration (NHTSA) sets and enforces them under 49 U.S.C. §32902; non‑compliance normally triggers per‑vehicle fines.

In late 2025, the Trump administration moved to “reset” or weaken the Biden‑era CAFE rules:

• NHTSA proposed a major rollback covering model‑year 2027–2031 light‑duty vehicles, reducing the required efficiency gains relative to Biden’s rule, which had targeted roughly 50.4 mpg for 2031 fleets.
• The proposal reinterprets the law to exclude electric and plug‑in hybrid vehicles from how CAFE targets are set and to bar the use of certain compliance credits and trading that Biden’s rule allowed.
• The administration also moved (earlier in 2025, via the One Big Beautiful Bill and related actions) to reduce or eliminate some CAFE penalty increases, effectively “defanging” enforcement.

The White House fact sheet and industry/analyst summaries describe this as lowering the stringency of annual mpg increases and re‑basing CAFE on internal‑combustion‑engine capability, which reduces compliance costs for automakers but also slows mandated fuel‑economy improvements.

A vehicle “stop‑start” (or automatic start‑stop) system is technology that shuts off the engine when the car is stopped (for example at traffic lights) and restarts it when the driver releases the brake or presses the accelerator, to reduce idling fuel use and emissions.

There was no law forcing every car to have stop‑start, but federal fuel‑economy and emissions rules gave automakers special credits (“off‑cycle” credits) for installing it, effectively making it a de‑facto requirement in many models.

In 2025 the Trump EPA moved to eliminate those incentives:

• EPA proposals and statements from Administrator Lee Zeldin described plans to remove fuel‑economy and emissions credits tied to stop‑start systems, calling them unpopular and of limited climate benefit.
• This means manufacturers no longer gain regulatory credit for including the feature and can omit it or make it optional without hurting their CAFE/GHG compliance calculations.

Practical effects:

• For drivers: more vehicles are likely to be sold without mandatory stop‑start; cars may feel more familiar to operate (no automatic engine shut‑off) but will use slightly more fuel in stop‑and‑go driving and emit more CO₂ and local pollutants at idle.
• For manufacturers: modest cost savings (fewer specialized batteries, starters and control hardware/software), somewhat higher tailpipe emissions and fuel use, but simpler compliance planning now that the technology is no longer rewarded in federal rules.

Revoking state‑level electric‑vehicle (EV) mandates refers mainly to undoing California’s authority to require rising shares of zero‑emission vehicles (and a 100% new‑EV sales mandate by 2035) under special waivers of the federal Clean Air Act.

Key 2025 steps:

• Congress passed, and President Trump signed, joint resolutions (e.g., sponsored by Sen. Markwayne Mullin) disapproving EPA rules that had granted or affirmed California’s EV and emissions waivers; Trump signed these on June 12, 2025.
• EPA and the Justice Department then moved to block or roll back California’s zero‑emission vehicle mandates and related rules, and similar requirements in the 17 “Section 177” states that had adopted California standards.

Implications:

• For states like California: they lose the ability to enforce stricter EV sales requirements than the federal government, at least while these rollbacks stand and litigation continues. Their climate and clean‑air strategies become more dependent on federal rules or state incentives rather than binding sales mandates.
• For automakers: they are no longer legally compelled by state rules to hit aggressive EV shares in California and follower states, giving them more flexibility to emphasize hybrids and gasoline models, though many companies say they will continue with longer‑term EV plans driven by global markets and previous investments.

The 2.4% increase and “best year since 2019” characterization are supported by:

• Omdia data reported by Reuters: automakers sold 16.2 million vehicles in the U.S. in 2025, a 2.4% increase from 2024; Reuters summarizes this as U.S. auto sales rising about 2%.
• Cox Automotive / Kelley Blue Book estimates: a December 17, 2025 forecast put 2025 new‑vehicle sales at 16.3 million, up 1.8% year‑over‑year and “the best sales year since 2019.”

Annual U.S. new‑vehicle sales are typically measured as total light‑vehicle sales (cars and light trucks) over the calendar year, combining automakers’ reported sales with registration and retail data compiled by firms such as Omdia, Cox Automotive/Kelley Blue Book, and sometimes NADA or government series based on sales/production.

“Make Driving Great Again” is a political slogan, not a formally defined, stand‑alone federal program.

• The January 6, 2026 White House article uses the phrase to frame a set of Trump administration policies (tariffs, CAFE rollback, removal of EV mandates, tax changes like the auto‑loan interest deduction) but does not establish any specific agency program, budget line, or legal authority under that name.
• Searches of official WhiteHouse.gov materials and federal registers show no separate statutory or regulatory program titled “Make Driving Great Again”; it functions as branding for the administration’s broader auto and transportation policy agenda.