What question did this study set out to answer?

To analyze how metal tariffs affect consumer credit in the auto industry, particularly through captive lenders.

February 2, 2026

Consumer Credit and the Incidence of Tariffs: Evidence from the Auto Industry

Puntos clave

To analyze how metal tariffs affect consumer credit in the auto industry, particularly through captive lenders.
Analyzed interest rate changes from captive automobile lenders post-tariff imposition.
Compared rates with noncaptive lenders that were not affected by the tariffs.
Examined the impact on low-income borrowers and competition in lending areas.
Consumers faced higher interest rates from captive lenders following the tariffs.
Low-income borrowers were disproportionately affected by rising rates.
Areas with less lending competition experienced greater increases in financing terms.

Resumen

Captive finance subsidiaries create a channel for trade policy to affect consumer credit. Examining the impact of the Trump administration’s metal tariffs on captive automobile lenders, we find that consumers received higher interest rates from captive lenders after the tariffs relative to unaffected noncaptive lenders. Further, we document a disparate impact on low-income borrowers and in areas with less lending competition. Our results suggest that tariffs may impact not only the price of goods but also the financing terms of purchases. Thus, focusing solely on directly affected product prices may underestimate tariff pass-through significantly. (JEL F13, F14, G21, L22, L61, L62)

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