Local automobile dealers appear varied in their views of President Donald Trump’s plan to impose a 25% tariff on foreign cars, with some brushing it off as a nonevent and others saying it would put a dent in consumers’ wallets.
Several of Trump’s economic advisers believe the president intends to follow through with his proposal that would impact close to $200 billion in foreign auto imports, The Washington Post reported earlier today. A study released last week by the Center for Automotive Research and commissioned by the National Automobile Dealers Association estimates that tariffs or quotas could cause the price of an average new vehicle sold in the United States to rise by $980 to $4,400, depending on the specifics of the policy.
“I don’t see where there’s a positive to it,” says Matt McKay, owner of All Star Automotive Group, who adds he is against the proposed tariffs. “I think it would push the cost of cars up, and people are already really sensitive to prices.”
McKay’s stance echoes the fears of many critics who contend tariffs would drive up the cost of all cars in the United States, which imported a record $192 billion in new passenger vehicles in 2017, according to the Post.
However, supporters argue Trump’s plan could lead Americans to buy more cars manufactured in the U.S., helping the national economy.
Eric Lane, owner of Gerry Lane Enterprises, says he’s heard the tariffs would raise existing prices by just $100 or $200, noting that’s a minuscule increase considering how much automobiles already cost.
Foreign countries ship automobile parts to the United States for low prices, says Lane, who sees the proposed tariffs as a way for America to come up ahead.
“It’s political football,” Lane says. “It’s a nonevent.”
It’s important to note that the European Union charges a 10% tariff on imports of U.S. automobiles, while the United States has a 2.5% percent tariff on European cars. The U.S. also charges a 25% tariff on light truck and sport-utility vehicle imports from other countries.
Several European automobile companies, like BMW and Mercedes, already manufacture cars in the United States. So do Japanese companies like Honda. None of these brands’ local dealerships could be reached for comment by deadline.
