CLEVELAND — With President Donald Trump’s 25% tax on imported cars, light trucks, and auto parts soon to go into effect, Northeast Ohio’s auto dealers and the customers they serve.
“It is concerning,” said Lou Vitantonio, President of the Greater Cleveland Auto Dealers Association representing 285 dealers in 26 counties in Northern Ohio. “We don’t have a crystal ball as to how this will all play out because the goalposts have changed a few times but we have to deal with what’s in front of us right now.”
Analysts expect the tariffs to drive up prices when many Americans struggle to afford a new vehicle.
“It’s going to be jarring and it’s going to make vehicles very unaffordable,” said Ivan Drury, Director of Insight at Edmunds, who studied the auto market for over 50 years.
He says the president’s planned 25% tariffs on any foreign-made vehicle set to go into effect April 3 and roughly a month later on foreign-made parts means you’ll be spending more for a new vehicle. As for how much?
“You know I could easily see a few thousand dollars,” he said. “You know because it is a percentage of the price you know easily 10K is not unforeseen.”
While the end of the month is usually a busier time for auto dealers, Vitantonio said he doesn’t expect a greater influx of customers this weekend looking to get ahead of the tariffs.
“A mad rush? No I don’t anticipate that because it’s going to be the people who were either intending to buy in the last 30 days and it just pushes them to do it,” he said.
That’s partly because not all auto shoppers are worried about tariffs; some we spoke with at the recent Cleveland Auto Show, like Todd Fitzgibbon, who works in the steel industry, see their purpose.
“Coming out of the steel mill, so no it doesn’t scare me. I’m glad for the tariffs. I think he should raise them a little higher, put them at 35%,” he said. “Take care of America.”
The goal of the tariffs is to bring back the auto manufacturing jobs that disappeared in the wake of NAFTA.
Thirty years ago at this time, Ohio’s top two largest employers were GM and Ford. Today, Ford ranks down in the 40s and GM in the 70s.
“We’re now at the point where half of the cars sold in this country aren’t made in this country and we have to shift gears on that very, very quickly,” Ohio Senator Bernie Moreno told News 5.
“I think we’re going to see the Lordstown plant, there’s a very high possibility that that starts making automobiles again. 10,000 people used to work in that plant and I think we can get back to that point.”
Moreno, at one time, owned around 15 auto dealerships, foreign and domestic. So what would his message be to his former colleagues who this might negatively impact?
“I don’t think they’re going to be negatively impacted. I think you’re going to see a lot of those foreign car companies make cars here in America,” he said.
“Mercedes Benz, BMW, they already make cars here in America, I think you’re going to see them bring more of the supply chain to the U.S. to avoid the tariffs. I think you’re going to see the companies that once moved to Canada and Mexico bring final assembly back to the U.S. So I think it’s going to be a net positive to all of Ohio.”
That’s long term; in the short term, Drury believes there are a few things that could happen right away.
“You can see the dealers, they know the inventory they have that doesn’t have tariffs placed on it become essentially more valuable.”
He also believes automakers will rethink the incentives they offer new car buyers.
“Do we need to put APR deals out there or do we take those away, to take away some of the cost to shuffle around some of the dynamics of pricing,” he said. “Because they don’t want customers really to have to bare the full 25%.”
