The Trump administration imposed 25% tariffs on both Canada and Mexico on Tuesday and car dealerships in the D.C. region are trying to determine whether the move will have an impact on them since some manufacturers do produce vehicles in both countries.
D.C.-area car dealer Jack Fitzgerald said his dealerships are taking a wait-and-see approach.
“The things we’re talking about haven’t happened yet. And it’s not easy to say, ‘well, if this happens, something else is going to happen.’ There are always unintended consequences, no matter what you do,” Fitzgerald told WTOP.
Among the new cars sold at his Fitzgerald Auto Mall dealerships in Maryland are Toyotas, and while some models are made in the U.S., others are manufactured outside of the country. Versions of the RAV4 SUV are made in Canada, and some Tacoma SUV models are made in Mexico.
Stellantis, which owns Chrysler, Jeep, Fiat, among other car brands, also produces cars in both countries.
For Fitzgerald, he said his concern is the layoffs hitting the federal workforce in the region.
“That’s certainly not going to help us, but all I can do is worry about it. I can’t do anything about it,” he said.
Meanwhile, Silver Spring Auto Group, which specializes in used vehicles, said if the prices do increase on new cars, sales will slow and it will be harder for his dealership to add to its inventory.
“If they don’t buy new cars, we’ll have a hard time getting used car inventory,” said Tsega Kebede, a manager at the dealership.
Kebede said that would be tacked onto other difficulties, which includes people holding onto older cars more since the pandemic and higher interest rates on car loans. On top of that, he said people are holding onto vehicles longer due to job security concerns.
Kebede said all those concerns together, plus a potential impact from the tariffs, could also lead to some sticker shock on used cars.
“The price of used car is going to go higher,” Kebede said.
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