Donald Trump is planning to impose a new tariff on imports from Europe, Canada, and Mexico. However, this move will lead to a loss in core profits for automakers and, in turn, dealers. On today’s episode of Inside Automotive, we’re joined by Cody Lusk, the President and CEO of the American International Automobile Dealers Association (AIADA), to help us break down what this means for the future of international auto sales.
The conversation kicks off with Lusk addressing President Trump’s long-standing belief in tariffs as a negotiating tactic. Lusk highlights how Trump’s use of tariffs during his previous term set a precedent for today’s current situation, which underscores the potential consequences for automakers, dealers, and consumers alike. If implemented, the tariffs could add thousands of dollars to vehicle prices, exacerbating affordability challenges in the automotive market.
Imports from Canada and Mexico, which are integral to the U.S. auto industry, could be particularly affected. Lusk explains the historical significance of these trade relationships, including the legacy of NAFTA and the recently renegotiated USMCA. While he commends the swift response of Canadian and Mexican governments to address Trump’s concerns, he stresses the need for a negotiated solution to avoid destabilizing the market.
When asked about dealer preparedness, Lusk expresses confidence in the resilience of the industry but acknowledges the potential for inventory disruptions and regulatory hurdles. He also touches on broader concerns, such as EV mandates and the competitive pressures of direct-to-consumer models like Scout and Tesla.
Looking ahead, Lusk emphasizes AIADA’s focus on advocating for dealers at all levels. This includes educating a fresh wave of policymakers in Washington, addressing tax policy, and mitigating unnecessary regulatory burdens to help dealers thrive in their communities.
"Affordability is the biggest issue impacting our industry for sure. And we don't need anything adding thousands of dollars to the cost of the vehicles. So I'm hopeful that we can find a negotiated solution... and have a prosperous 2025." – Cody Lusk
