If the U.S. government imposes a 25% tariff on imported vehicles starting April 2, affordable compact models priced under $30,000 are expected to take the most brutal hit. These compact vehicles are highly price-sensitive and are often produced outside the U.S. to reduce manufacturing costs due to lower labor expenses.
In particular, a comparison of Korean and Japanese brands—which dominate this segment—suggests that Korean automakers will be more severely impacted. Toyota and Honda primarily produce their compact models locally in the U.S., while Hyundai, Kia, and GM Korea manufacture theirs in South Korea and Mexico. All 830,000 compact vehicles sold last year in the U.S. by these three companies were produced outside the country.
According to Cox Automotive, a U.S. auto market research firm, 50% of new vehicles under $30,000 sold in the U.S. last year were manufactured overseas. This is a high proportion, especially considering the overall import ratio for new cars sold in the U.S. during the same period was 44%.
Cox Automotive estimates that a 25% tariff would raise the average price of imported vehicles in the U.S. by 16.6%. This could be devastating for compact cars that rely on competitive pricing. The firm warned that many affordable models might disappear from the U.S. market.
If the tariff takes effect, Trax prices will jump over $3,700 … All 520,000 Hyundai and Kia compact cars will be affected
Leading value-for-money models include the Chevrolet Trax Crossover and Trailblazer, both of which are compact SUVs. These are exported to the U.S. from GM Korea’s Changwon and Bupyeong plants. The Trax Crossover, in particular, saw its U.S. sales surge by 83% in 2024 to about 200,000 units, making it the top-selling model in the compact SUV category, surpassing the Subaru Crosstrek (about 181,000 units) and Honda HR-V (about 151,000 units). The Trailblazer also sold around 104,000 units, ranking fifth.
The Trax Crossover starts at $21,795. It is praised for delivering excellent quality and value at a reasonable price, and it has been named one of the 10 best trucks/SUVs/vans for two consecutive years. However, if a 25% tariff is imposed, the price would rise by 16.6%, increasing the starting price to approximately $25,000. The Trailblazer’s price would similarly rise.
All Hyundai and Kia compact models sold in the U.S. are also within the scope of these tariffs. Last year, Hyundai sold around 136,000 Elantras, 82,000 Konas, and 24,000 Venues in the U.S.—all manufactured at Hyundai’s Ulsan plant and exported. Kia sold 52,000 Souls and 59,000 Seltos models produced at its Gwangju plant. About 30,000 Niros were made at Kia’s Hwaseong plant, and 139,000 K4s (the successor to the K3) were produced at Kia’s Mexico plant.
Toyota Corolla, the No. 2 compact sedan in the U.S., is fully U.S.-made… Japanese automakers may gain ground in growing compact market
Among Japanese brands, Nissan, Subaru, and Honda export some compact models to the U.S. from abroad. Nissan produces the Kicks SUV (77,000 units sold last year) and Sentra sedan (152,000 units) entirely in Mexico for the U.S. market. Subaru produces part of its Crosstrek compact SUV lineup in the U.S. but supplements it with units made in Japan. The Honda Civic, which led the U.S. compact sedan market with 242,000 units sold last year, has its hatchback version produced in the U.S., while the rest is imported from Canada.
In contrast, the Toyota Corolla, the second-best-selling compact sedan in the U.S. with 232,000 units sold, is fully manufactured domestically, avoiding any fallout from the upcoming Trump tariffs. Likewise, the Honda HR-V, ranked third in the compact SUV segment, is also made entirely in the U.S. For this reason, Bloomberg last week named the Corolla, HR-V, and Civic hatchback— all Japanese-brand models—as those most likely to lead the under-30,000-dollar market in the U.S. moving forward.
In 2025, the average price of a new vehicle in the U.S. has risen more than 20% over the past five years, nearing $50,000. Although large vehicles have traditionally been more popular in the U.S., high interest rates and rising car prices have shifted attention to smaller models. According to U.S. auto market researcher Edmunds, sales of mid-size SUVs from January to November last year fell by 2% year-over-year, while compact and subcompact SUVs rose by 11%. Full-size sedan sales plunged by 47%, but compact sedan sales climbed 16%, marking a rebound for the first time in years.
