Those in the market for a new set of wheels might want to track how the tariff war develops between the U.S. and its neighbors because it could affect their bottom line.
The White House has already rolled back that 25% tariff for automakers importing product from Mexico and Canada into the United States after speaking with industry leaders.
Uncertainty, however, remains as it’s been described as a one-month pause.
Industry experts have been sounding the alarm because, according to S&P Global, one in five cars sold in the United States come from one of those countries.
The Trump administration has made clear it wants automakers to bring production back to the U.S. President Donald Trump admitted during his address before a joint session of Congress Tuesday that there could be interruptions in the short-term, but the long-term payoff would outweigh the struggle out of the gate.
Those struggles include the rising costs of certain vehicles to supply chain issues as automakers slow down production.
Ryan Bouchey of Bouchey Financial Group said there is a lot of overlap with what we do here in the U.S., so the impacts go far beyond the vehicles coming into the country.
“Some of the estimates are upwards of potentially $10,000 of increased costs on cars. Who is going to pay that?” he said. “Is it going to be us as consumers and purchasers? Is it going to be the car companies? And what’s the effect if it is them versus us in terms of the economic impact?”
Bouchey said he’s been fielding calls from clients all week. He said despite the negativity and volatility surrounding some of these policies, it’s important not to overreact unless some of these short-term issues persist or worsen.