In U.S. auto market, uncertainty reigns over the potential impact of Trump’s tariff war
Los Angeles — With a 25% tariff on imported vehicles and vehicle parts from Canada and Mexico set to take effect on April 2 as part of President Trump’s trade wars, car shoppers are unsure about whether to buy now or risk facing higher prices later.
Even after 20 years of selling cars, general manager Brandon Wishengrad still can’t predict how impending tariffs will impact prices at his family’s Nissan dealership in Los Angeles.
Wishengrad admits he doesn’t know what to say to customers about whether prices could change.
“It’s tough to say,” Wishengrad said. “At the moment, I think we know just as much as anybody else does.”
The average cost of a new car could increase anywhere from $3,500 to $10,000 if the tariffs take effect, according to estimates from the Anderson Economic Group. That potential uptick also depends on where the parts come from.
Jessica Caldwell, head of insights at Edmunds, says it is a spreadsheet nightmare.
“A lot of the vehicles are final-assembled in the United States, but get engines, transmissions from Mexico and Canada,” Caldwell explained. “…If you look across the entire industry, there’s nothing that’s 100% American.”
Mr. Trump’ 25% tariffs took effect March 4, but one day later, he issued a one-month reprieve to U.S. automakers after talking to leaders from the Big Three automakers: Ford, General Motors and Stellantis. Then on March 6, he also issued a pause until Apr 2 on all imports from Canada and Mexico that are covered by the United States-Mexico-Canada Agreement.
Caldwell says that she suspects that in “many cases” automakers probably do not yet know what the tariffs will cost them.
“Especially things like, if a part does cross the border eight times,” Caldwell added.
She notes that while automakers “can build factories here in the United States, it’s just going to take time.”
In the meantime, Caldwell says anyone who drives a car should prepare to pay more.
“It’s not just people buying vehicles, I think anybody that is having to repair their vehicle or just service their vehicle are gonna experience higher costs as well,” Caldwell said.
When it comes to new cars, Caldwell believes buyer incentives and other discounts will be among the first to disappear.
“So if someone is looking to buy a new vehicle in the next few months, I’d say probably do it sooner rather than later,” Caldwell said. “We don’t know if the tariffs will go through ultimately, but if you can’t afford to take that gamble, I think it’s probably best to err on the side of caution.”
Wishengrad agrees that the back-and-forth about the trade war has become white noise for consumers.
“I do think so, eventually, you know, people start to tune that out.”
