With looming tariffs on Canadian and Mexican imports, the auto industry is bracing for potential disruptions. Cody Lusk, President and CEO of the American International Automobile Dealers Association (AIADA), joins us on the latest episode of CBT Now to discuss the latest developments, emphasizing the industry’s concerns over affordability and the broader economic impact on consumers and dealers.
Cody Lusk highlighted the growing uncertainty surrounding the Biden administration’s approach to tariffs, noting that while former President Trump had frequently championed tariffs as a negotiating tool, the current administration has yet to clarify its long-term stance.
Lusk recalled a recent panel discussion at the Washington Auto Show, where industry leaders voiced concerns over the ripple effects of even the threat of tariffs—particularly in the parts sector.
The implications for affordability are at the forefront of AIADA’s concerns. With the average price of a new vehicle now hovering around $50,000, dealers are already feeling the strain as higher costs and rising interest rates squeeze consumer budgets. Lusk cited a dealer with ten stores who reported sluggish January and February sales, attributing the slowdown to a combination of affordability challenges and economic uncertainty.
The AIADA is focusing its advocacy efforts on engaging policymakers with the message that tariffs could further restrict consumer access to new vehicles while harming domestic jobs. Lusk pointed to the auto industry’s interconnected supply chain, explaining that retaliatory tariffs from trading partners like China have already forced manufacturers to adjust operations, such as BMW shifting production to China instead of exporting from the U.S.
In response to the growing concerns, AIADA has launched SaveAutoJobs.com, a new platform providing dealers and consumers with information on tariff implications and tools to contact their congressional representatives. Lusk stressed the importance of engaging with policymakers, noting that even lawmakers who may not seem influential could have a direct line to the White House.
Lusk also addressed the broader economic context, including the potential return of a border adjustment tax as part of discussions on renewing corporate tax cuts. While AIADA remains watchful, Lusk emphasized the need for patience, stating that dealers should wait for concrete policy actions before reacting.
"President Trump has said his favorite word in the dictionary is ‘tariff.’ So we’re not going to get anywhere by trying to tell him we think tariffs are wrong. What we have on our side is the affordability issue. The average price of a vehicle is $50,000 with a $150 monthly payment—and that’s before considering rising car insurance costs." - Cody Lusk
