SOUTHFIELD, Mich. (WXYZ) — The price to get a car or truck could once again be on the rise as President-elect Donald Trump is promising to impose tariffs on several countries.
In a post to Truth Social, Trump said he plans to place tariffs on China, Mexico and Canada in an effort to pressure those nations to slow the flow of drugs and illegal immigrants into the United States.
However, auto analysts say if the tariffs are implemented as currently proposed — 25% on Canada and Mexico and 10% on China — it will result in higher costs for the auto industry.
"Auto makers from Europe, from Japan, from Korea, from Mexico are all going to be impacted by this and the effect will be immediate," automotive expert John McElroy with Autoline said. "Now the question: is Trump really going to do this or is this a negotiating tactic of his."
McElroy says the tariffs will force automakers to raise prices significantly, and those costs will be passed directly on to the consumer.
Hear more from automotive expert John McElroy in the video below:
"Immediate impact will be at dealerships. Car dealerships that sell imported cars are going to see the prices of those things go up immediately. They will not waste any time at all. They will pass those costs along. So dealers will charge more, car companies will charge more, car suppliers will charge more and then others will follow suit," McElroy said.
The idea is worrisome for people currently in the market for a new car like Tony Attia, who spent Tuesday perusing through dealerships at the Troy Motor Mall.
"I personally like BMWs, so I’m looking around for them. Found one over there, found a few over there," Attia said as he stood in a car lot. " I’m looking to find something that’s not too overpriced, kind of in the 30s, 40s (thousand dollars)."
Attia says knowing prices may be much higher in the new year is concerning.
"It is kind of scary. That’s why I’m trying to look for one right now just to lock in on one, low miles and everything, just so I can get one quickly before that stuff goes up," Attia said.
Dealers say while tariffs certainly can have an impact on prices and their sales next year, it's too early to panic.
"We’re in a global car industry, so every one of these cars has some piece or all of it produced outside of the country," said Ken Thomas, who is the operating partner at Northland Chrysler Dodge Jeep Ram.
Thomas says this is the first time he's seen proposed tariffs on this scale but says dealers won't know the true impact until they know what rate Trump will ultimately impose. However, Thomas says consumers will likely have to permanently adjust to higher prices as the new normal.
"We don’t know what the final results are going to be when it’s all said and done, so I’m not going to panic. Hoping that no one else panics at this point either," Thomas said. "There’s been a lot that’s happened. Obviously the pandemic, then the chip shortage and obviously, a big part of the chip shortage is most of them were manufactured outside of the country, so that had a big impact on us already."
Dealers say if you're in the market for a new car, now is the best time to buy ahead of any tariffs and as end of the year deals ramp up.
"Consider leasing. Leasing gives people the opportunity in most cases to have a lower payment now with the option of purchasing that vehicle that they’re leasing two or three years down the road," said George Glassman, who is the president of Glassman Automotive Group.
Glassman says while tariffs stand to impact dealers' bottom lines, they're hopeful Trump will take into consideration any negative impact on the industry before settling on a final tariff rate.
"I’m confident that we’re going to be in an upswing. I think the bigger concern is what happens with electric vehicles and the potential of the tax credit going away," Glassman said.
