Los Angeles — With a 25% duty on imported automobiles and vehicle components from Canada and Mexico slated to go into effect on April 2 as part of President Trump’s trade war, car buyers are wondering whether to purchase now or risk paying more later.
Even after 20 years of selling automobiles, general manager Brandon Wishengrad is unable to foresee how imminent tariffs would affect pricing at his family’s Nissan dealership in Los Angeles.
Wishengrad confesses that he is unsure what to tell clients about potential pricing changes.
“It’s difficult to say,” Wishengrad said. “At the moment, I think we know just as much as anybody else does.”
According to Anderson Economic Group projections, if the tariffs go into place, the average price of a new automobile may rise by $3,500 to $10,000. That potential increase is also dependent on where the components originate from.
Jessica Caldwell, Edmunds’ head of insights, describes it as a spreadsheet nightmare.
“A lot of the vehicles are final-assembled in the United States, but get engines, transmissions from Mexico and Canada,” Caldwell told me. “… If you look over the whole business, nothing is really American.”
Mr. Trump’s 25% tariffs went into force on March 4, but one day later, he granted a one-month respite to U.S. automakers after speaking with representatives from the Big Three automakers: Ford, General Motors, and Stellantis.
On March 6, he also imposed a moratorium until April 2 on all imports from Canada and Mexico covered by the United States-Mexico-Canada Agreement.
Caldwell estimates that in “many cases,” automakers do not yet know how much the tariffs would cost.
“Especially things like, if a part does cross the border eight times,” said Caldwell.
She points out that automakers “can build factories here in the United States, it’s just going to take time.”
Meanwhile, Caldwell says everyone who drives a vehicle can expect 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,” according to Caldwell.
When it comes to new automobiles, Caldwell thinks that buyer incentives and other discounts will be among the first to go.
“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,” according to Caldwell. “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 feels that the back and forth over the trade war has become background noise for customers.
“I do think so, eventually, you know, people start to tune that out.”