As President Trump moves forward with his plan for increased tariffs on imported cars, Chicago-area auto dealers are preparing for the worst
With the average price of a new car hovering around fifty thousand dollars more than 30 percent in the past five years, newly announced tariffs are just one more headache for John Crane.
“I had a full head of hair yesterday,” joked the slightly balding head of Chicago’s Hawk Auto Group. “That’s how bad it is.”
Crane’s company is already running advertisement encouraging those in the market to buy now to avoid the 25 percent tariffs on imported vehicles and parts ordered Wednesday by President Donald Trump.
But Crane said he doesn’t expect consumers to face the full cost of those tariffs.
“All these manufacturers do work in a competitive environment,” Crane said. “A brand like Ford can’t afford to overprice itself compared to Chevrolet and Stellantis, so we expect increased prices but as little as they possibly can.”
As he signed the executive order Wednesday, Trump said many auto makers are in a good position to take advantage of the tariffs.
“They have already built their plants,” the President said. “But their plants are underutilized so they will be able to expand them inexpensively and quickly,” he said.
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The UAW, which had once criticized Trump, also applauded the move to end what its President Shawn Fain described as “the free trade disaster that has devastated working-class communities for decades.”
But for those in the market for a new vehicle, the short term will bring higher prices, even though the amount is still unclear.
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Crane calls it a complex scenario. There are no popular cars that are 100% made in the USA. Almost all of them are constructed using imported parts. Most of those parts come from Canada and Mexico.
“We do know that prices will be going up...but they won’t be going up by the full 25%,” Crane said.
Crane expects that manufacturers will try to average out the price increases between vehicles that will be hit by tariffs, like a Mexican-built Ford Maverick and an American-built Ford Bronco, which will be relatively tariff free.
Despite the higher costs, the Trump tariffs will be good for American jobs, according to the UAW’s Shawn Fain, who said they will help end what he called a "free-trade disaster that has devastated working class communities."
Not only will new car prices be affected by the tariffs, but eventually, used car prices will be affected as well.
Crane said used car prices will hold their value longer than usual as buyers look for a more affordable alternatives to increasing new car prices. Eventually, he said, they will track those price increases
Crane’s advice? Don’t order a new car; buy it off the lot or ask your dealer to find one for you.
That way you can avoid factory increases...at least for the 90 days or so dealers expect their current inventories to last.
