CHICAGO (NewsNation) — While Noted economist Arthur Laffer warns that President Donald Trump’s 25% tariffs on auto imports could add $4,711 to the cost of a vehicle, some in the used car industry tell NewsNation it could mean a spike in sales — but not likely before a spike in prices.
Manny Gonzalez, owner of Manny Trucks in Chicago, said the market is similar to what was happening during the COVID-19 pandemic and supply chain issues. Gonzalez said that during that period, he had to raise prices by about $1,500 to $2,000.
Trump tells automakers not to raise prices over tariff: Official
He, however, cautioned customers not to panic.
“First people go a little bit crazy and they start to rush to buy a used car, and that boosts the price for used cars for us buying them,” he said. “People, let’s not be scared. Whatever goes up is going to come down; that always happens.”
Trump maintains the 25% tariffs will cause more foreign and domestic automakers to expand production and open new factories in the U.S. On Monday, he celebrated a planned $5.8 billion investment by South Korean automaker Hyundai to build a steel plant in Louisiana as evidence that his strategy would succeed.
How will Trump’s auto tariffs affect car prices?
Trump said the 25% auto tariffs would help to reduce the federal budget deficit while moving more production into the United States.
“For the most part, I think it’s going to lead cars to be made in one location,” Trump told reporters on Wednesday. “For right now, the car would be made here, sent to Canada, sent to Mexico, sent to all over the place. It’s ridiculous.”
