Studies from University of Kentucky Add New Findings in the Area of Investment (Consumer Credit and the Incidence of Tariffs: Evidence From the Auto Industry): Investment

2026 MAR 09 (NewsRx) -- By a News Reporter-Staff News Editor at Economics Daily Report -- Investigators publish new report on Investment. According to news reporting out of Lexington, Kentucky, by NewsRx editors, research stated, “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.”

Our news journalists obtained a quote from the research from the University of Kentucky, “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.”

According to the news editors, the research concluded: “Thus, focusing solely on directly affected product prices may underestimate tariff pass-through significantly.”

This research has been peer-reviewed.

For more information on this research see: Consumer Credit and the Incidence of Tariffs: Evidence From the Auto Industry. American Economic Review, 2026;116(2):627-673. American Economic Review can be contacted at: Amer Economic Assoc, 2014 Broadway, Ste 305, Nashville, TN 37203, USA.

Our news journalists report that additional information may be obtained by contacting David Sovich, University of Kentucky, Lexington, KY 40506, United States. Additional authors for this research include Kristine W. Hankins and Morteza Momeni.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1257/aer.20230432. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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