On Friday, the Trump administration placed tariffs on all imported Steel and Aluminum from Mexico, Canada, and the EU. To talk more about how the automotive industry can be directly impacted, CBT News is joined by Cody Lusk, AIADA president, and Brad Strong AIADA chairman.
After the news broke that tariffs were being placed on steel and aluminum the auto industry started buzzing. What does this mean for automotive dealerships? Should Dealers brace for the possible consequences? Lusk and Strong talked openly about this and more to CBT’s Jim Fitzpatrick and they did not hold back.
Lusk tells CBT News that changes are coming. He explains, “Well, prices are going to go up. We were starting to see that with steel prices going up, even before the tariffs went into place. I think what surprised everyone was the scope of the tariffs, to see a lot of our allies including Canada in particular, who we actually have a trade surplus in steel, that was the big shocking thing. I think we thought that everything was going to be aimed at China, that’s why you saw the big reaction on Capitol Hill. A lot of people were really upset, again, at the scope of that.”
So what does that mean for the Industry’s dealers? Strong believes dealers will see a spike in the price of average vehicles due to 25% tariff on automotive imports. If correct, this could cause price tags to rise anywhere between $3,500 to $30,000.
This could be detrimental to the industry as we are seeing consumers becoming more price sensitive. Lusk believes that consumers are actually going to be heavily affected by the imposed tariffs. “Countries don’t pay tariffs, consumers pay tariffs. Consumers are going to be the ones bearing the brunt. And, you’re talking about every vehicle in America that will be impacted.” Says Lusk.
Since President Trump took office roughly 500 days ago, he said that he wants to make America great again by putting America first but Lusk and Strong are not convinced that this is the best direction to achieve such. When asked about how the nation’s dealers should feel with the chosen course of action Strong feels it will negatively impact not only car sales but also dealerships.