Introduction to Auto Tariffs
Queensbury, N.Y. (NEWS10) — President Donald Trump is imposing 25 percent tariffs on vehicle imports. The move is expected to increase prices for American consumers and affect automakers that depend on global supply chains. The manager of Garvey Volkswagen-Kia in Queensbury says that if the Trump administration’s 25 percent tariffs on automobiles takes effect it could particularly drive up the prices of foreign brands like the cars in his lot.
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Impact on Local Car Dealerships
Manager John Peter "JP" Garvey walked NEWS10’s Zion Decoteau through his lot of German and South Korean Cars. He anticipates customers won’t feel the pinch immediately. “For the next 60 to 90 days, most dealers will have enough inventory on the ground that they’ll have enough cars that were imported to the US or that were made in the US before the tariff came into effect" said Garvey.
Future Uncertainties
However, Garvey says the future after that is uncertain, and predicts prices could accelerate $5,000 to $15,000 per car. “Obviously we know that if cars get more expensive people will buy fewer of them which will mean that will have mark-on effects in the used car market as well, because people are buying fewer cars and the supply of used cars gets lower” Garvey added.
Purpose of the Tariffs
The President’s purpose for doing all this is to rev up domestic car manufacturing, and to promote trade agreements that are fair to the United States. Garvey sympathizes, however —“Even for cars made in the US, there’s no such thing as a 100 percent American car," Garvey explained.
Effects on Domestic Manufacturing
The White House says that of the 16 million cars Americans bought last year, half were imports. Of those 8 Million cars assembled here, only 50 percent of their parts were made in America. And parts — of which his dealership has so many — are part of what Garvey expects to become more expensive. “A lot of these parts are made in the United States but a lot of them come to us from overseas, the US, Canada and Mexico as well and those will be impacted by the tariffs next month" Garvey explained further.
Impact on Budget Models
Some budget models like the Kia K4 are produced in Mexico for reasons like cheaper labor. Garvey worries tariff related price hikes could drive them out of the market. “If you look at those cars that entirely exist because of their lower price points, and now suddenly they’re 25 percent more expensive, they’re sort of whole reason for being goes away" he continued.
Conclusion
The Trump administration’s auto mobile tariffs are tentatively set to take effect on Wednesday, April 2. The tariffs are expected to have a significant impact on the automotive industry, with potential price increases and decreased sales. As the industry waits to see the full effects of the tariffs, one thing is certain – the future of the automotive industry will be shaped by the decisions made by the Trump administration.
FAQs
Q: What are the Trump administration’s auto tariffs?
A: The Trump administration is imposing 25 percent tariffs on vehicle imports.
Q: How will the tariffs affect car prices?
A: The tariffs are expected to increase prices for American consumers, with potential price increases of $5,000 to $15,000 per car.
Q: How will the tariffs affect domestic car manufacturing?
A: The President’s purpose for imposing the tariffs is to rev up domestic car manufacturing, and to promote trade agreements that are fair to the United States.
Q: Will the tariffs affect all cars equally?
A: No, the tariffs are expected to have a greater impact on foreign brands and budget models, which may be driven out of the market due to increased prices.
