In U.S. auto market, uncertainty reigns over the potential impact of Trump’s tariff war

The automotive industry is facing uncertainty as a 25% tariff on imported vehicles and vehicle parts from Canada and Mexico is set to take effect on April 2 as part of President Trump’s trade wars. This has left car shoppers in a dilemma about whether to make a purchase now or risk facing higher prices later.

Brandon Wishengrad, a general manager at a Nissan dealership in Los Angeles, has been in the car business for 20 years but is still unsure about how the impending tariffs will impact prices at his dealership. With the average cost of a new car potentially increasing anywhere from $3,500 to $10,000, customers are left wondering about the future of car prices.

Jessica Caldwell, head of insights at Edmunds, describes the situation as a “spreadsheet nightmare” due to the complex supply chain in the automotive industry. Many vehicles are final-assembled in the United States but rely on parts from Mexico and Canada, making it difficult to determine the exact impact of the tariffs.

President Trump initially imposed the tariffs on March 4 but later issued a one-month reprieve to U.S. automakers after discussions with industry leaders. The pause on imports from Canada and Mexico covered by the United States-Mexico-Canada Agreement has been extended until April 2.

Caldwell believes that automakers are still uncertain about the cost implications of the tariffs, especially for parts that cross borders multiple times. While building factories in the U.S. is an option, it will take time to implement.

In the meantime, Caldwell advises car owners to prepare for higher costs, not just for purchasing new vehicles but also for repairs and servicing. She predicts that buyer incentives and discounts on new cars will likely disappear as a result of the tariffs.

Both Caldwell and Wishengrad urge consumers to act sooner rather than later if they are considering buying a new vehicle. The uncertainty surrounding the trade war has become white noise for many consumers, but it’s essential to consider the potential impact on car prices.

As the automotive industry navigates the challenges posed by the tariffs, car shoppers are left with a difficult decision about when to make their purchase. The future of car prices remains uncertain, and it’s crucial for consumers to stay informed and make informed decisions in the face of ongoing trade wars.