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(NewsNation) — President Donald Trump’s 25% tariffs on automobiles not manufactured in the United States are set to go into effect in early May, but some car dealers fear that tariffs may keep Americans from purchasing new cars.
Tom Maoli, who owns six car dealerships in New Jersey, estimates that the tariffs will add $300 to the average monthly car payment and $10,000 to the price of an average new car. The bump may be enough to lead car owners to repair their existing vehicles rather than invest in new ones, Maoli told NewsNation.
The Financial Times reported this week that Trump is considering exempting auto parts from China from the tariffs, which Maoli said will drive revenue to dealerships’ repair shops but not to their showrooms.
“(Trump) has to exempt it across the board,” Maoli told NewsNation. “If he hits the manufacturers with this increase, they’re going to pass it on to the consumers.”
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Maoli estimates the current monthly car payment to be $742 per month, which he said would increase $300 with the tariffs in place. Meanwhile, the price of a new car could jump $10,000 from the current average of $48,641.
“I think he has to reconsider his position,” Maoli said. “Clearly, he’s a smart guy, and he knows exactly what he’s doing, but he’s got to get to the table and renegotiate this. He’s got to do this with a carrot, not a stick.”
Maoli said that Trump has to give car manufacturers a reason to build plants in the United States by providing them with interest-free loans and other tax incentives.
“Right now, what he’s doing is causing chaos and is causing the consumer angst,” Maoli said.
