The announced 25 percent tariffs on imported automobiles are set to go into effect Thursday, April 3.<\/p>\n\n\n\n
President Donald Trump signed an executive order<\/a> in March announcing the auto tariffs. The order additionally announced a 25 percent on certain imported auto parts no later than May 3.<\/p>\n\n\n\n The new tariffs followed previously implemented tariffs on steel and aluminum imports.<\/p>\n\n\n\n The tariffs are expected to impact not only new vehicle prices but also used vehicles.<\/p>\n\n\n\n \u201cTariffs are likely to be fairly inflationary for used vehicles. Our initial estimates on wholesale values could rise 2.2 percent this year (using a blend of our scenario outcomes) but may not rise quite as fast in 2026,\u201d said Jeremy Robb, Cox Automotive\u2019s Senior Director of Economic and Industry Insights<\/a>. \u201cHowever, there\u2019s likely more inflationary pressure this year as consumers trade down, so it\u2019s possible that values end up rising 2.8 percent year over year by the end of December (all else being equal).<\/p>\n\n\n\n \u201cLonger term, there will be a trade-off. Several years of this tariff impact will cause more consumers to trade down from new to used. If tariffs cause the average price of a new unit to rise above $50,000 (which is likely given prices today), then even more consumers cannot or will not pay up for a new vehicle. As a result, some consumers will get priced out of new vehicles and must trade down to used vehicles, which puts more upward pressure on the value of used vehicles. Additionally, if we see higher used values, that will raise the value equation (higher Cox Automotive Lease Equity or CALE) of off-lease units \u2013 which are already in short supply \u2013 and even less of them could come back to the used-vehicle supply chain. All of those factors put upward pressure on demand for used vehicles and, therefore, on price.\u201d<\/p>\n\n\n\n