- The Trump administration’s automotive tariffs may cause annual auto sales to fall by roughly two million units in the United States and Canada, a Reuters report shows.
- According to Reuters, if the current automotive tariffs remain in place until 2035, forecasts show a seven-million-car discrepancy compared to the same timeline with no trade war.
- Despite placing a pause on the “reciprocal tariffs,” the administration’s 25 percent auto tariffs remain in effect.
As the Trump administration’s 25 percent tariffs on the automotive sector cause car prices to rise, many would-be customers will likely rethink their decision to replace their aging car. According to a new report from Reuters, between the United States and Canada, the resulting penny-pinching could lead to 1.8 million fewer annual car sales this year. According to Reuters, the data was sourced from a forecast with the Detroit-area automotive advisory firm Telemetry. In Telemetry’s forecast, the firm predicted that if the current 25 percent tariffs remain in effect until 2035, annual sales of passenger vehicles in the U.S. and Canada would fall by seven million units. That figure is in contrast with a separate forecast of the 24.6 million sales in a scenario without trade conflicts. Mario Tama|Getty ImagesWhile the tariffs have been in place for less than a month, the effects have already been dramatic. Several automakers have either stopped vehicle shipments at the ports or paused them entirely. Others have ramped up production on cars made in America while pausing production of cars built elsewhere. Automakers are responding differently to pricing fluctuations as well. Ford is offering an employee discount to everyone, though only through June 2. Some, such as Hyundai, announced that they won’t raise prices (for varying amounts of time)—though, in Hyundai’s case, the automaker has also dropped its complimentary maintenance program. As the dominoes begin to fall, we may see more consumers look to the “lightly used” car market, which could cause a squeeze similar to the constraint felt during the COVID-19 pandemic. If the demand for used cars goes up, we’ll see prices for those models rise along with tariff-affected new models. More Tariff NewsJack Fitzgerald’s love for cars stems from his as yet unshakable addiction to Formula 1.
After a brief stint as a detailer for a local dealership group in college, he knew he needed a more permanent way to drive all the new cars he couldn’t afford and decided to pursue a career in auto writing. By hounding his college professors at the University of Wisconsin-Milwaukee, he was able to travel Wisconsin seeking out stories in the auto world before landing his dream job at Car and Driver. His new goal is to delay the inevitable demise of his 2010 Volkswagen Golf.
Source: caranddriver.com
