Auto manufacturer Ford informs dealers that vehicle prices may increase in June if Trump's tariffs persist.
Revised Article:
Get ready to dig deeper into your pockets if you're shopping for a new set of wheels, thanks to President Trump's latest move. Starting from April 3, he imposed a whopping 25% tariff on all imported cars, and it's already making a dent in Americans' wallets.
Ford, one of the major automakers in the US, has let the cat out of the bag, issuing a warning to its dealers about the impending price hikes. In a memo first reported by Automotive News, Ford informed its dealer network that the cost of these tariffs could be passed down to consumers, starting as early as June, since these tariffs look like they'll be sticking around for a while.
Andrew Frick, president of Ford's retail sales unit, didn't mince words in the memo: "We will not increase the MSRP (manufacturer's suggested retail price) for any vehicle currently in inventory with our Ford and Lincoln dealers." He added, "However, in the absence of material changes to the tariff policy as articulated to date, we anticipate the need to make vehicle pricing adjustments in the future, which is expected to happen with May production."
Ford confirmed the memo's accuracy to CNN, but reassured consumers that there won't be any immediate changes in retail prices at their dealerships. That's because cars produced in May won't be on the lot until June or later. "Customers will have a lot of choices, and we have plenty of inventory to choose from through June 2," Ford said in a statement. "The tariff situation is dynamic, and we continue to evaluate the potential impact of tariff actions."
The auto industry, dealers, and American car buyers have been bracing for the impact of tariffs, which could turn the car-buying market on its head in the coming weeks. Experts predict that the 25% tariff could jack up the cost of building or importing cars by thousands of dollars each, and also reduce the supply of vehicles available for sale.
To add fuel to the fire, the administration is planning to put tariffs on auto parts as soon as next month, which could bump the cost of cars even higher. That's because all cars assembled in the US contain some imported parts.
To appease customers, Ford previously announced an "employee pricing" discount offer for buyers on most of its vehicles on April 3, the day that tariffs on imported cars took effect. But the memo from Ford to its dealer network suggests that it might soon be unavoidable for Americans to feel the bite of tariffs on car prices.
Interestingly, Trump hinted earlier this week that he might alter the policy on tariffs on auto parts. "I'm looking at something to help some of the car companies where they're switching...parts that were made in Canada, Mexico, and other places, and they need a little bit more time," Trump said in remarks to journalists in the Oval Office. "They're going to make them here, but they need a little bit more time."
As you might know, automakers don't set the final sticker price for customers – car dealerships do. Most car companies sell cars to dealerships, which are independently owned businesses. They then negotiate individually with buyers for the final price. If automakers raise the wholesale prices they charge dealers, that could raise the prices for the buyer.
Tariffs will push up the cost of building the cheapest American cars by an additional $2,500 to $5,000, and up to $20,000 more for some imported models, according to Anderson Economic Group. Car prices could climb even higher due to reduced supply.
Cox Automotive estimates that higher costs from tariffs will cut North American car production by 10% to 20%, translating to millions of fewer cars sent to US dealerships. Many foreign automakers will likely halt or curtail production of the millions of cars they import, with analysts predicting that 3.7 million vehicles from Asia and Europe would be affected in 2024 alone.
In fact, Honda has already confirmed it plans to stop production in Japan of the hybrid version of the Civic hatchback built for the US market.
In a nutshell, if demand stays strong, prices may soar as supply shrinks, following the trend seen in 2021, when a global shortage of computer chips sent average new car prices 17% higher. But this time, experts think demand won't be as strong, thanks to a combination of factors including weaker consumer confidence, fewer buyers rushing to beat the tariffs, and the ongoing economic buzzkill from the pandemic.
- The auto industry is bracing for the impact of tariffs on imported cars, with fears of price hikes that could turn the car-buying market upside down.
- Experts predict that the tariffs could increase the cost of building or importing cars by thousands of dollars each.
- The reduced supply of vehicles available for sale is also a concern in the wake of the tariffs.
- The administration is planning to put tariffs on auto parts as soon as next month, potentially further increasing car prices.
- All cars assembled in the US contain some imported parts, which could be affected by the tariffs on auto parts.
- Ford has issued a warning to its dealers about impending price hikes due to the tariffs on imported cars.
- Andrew Frick, president of Ford's retail sales unit, warned that the tariffs could result in pricing adjustments, starting in May.
- Ford has not yet made any immediate changes in retail prices at its dealerships.
- The cost of these tariffs could potentially be passed down to consumers.
- Car prices could climb even higher due to reduced supply as a result of the tariffs.
- Cox Automotive estimates that higher costs from tariffs will cut North American car production by 10% to 20%.
- Many foreign automakers may halt or curtail production of the millions of cars they import as a result of the tariffs.
- Analysts predict that millions of vehicles from Asia and Europe could be affected by the tariffs in 2024 alone.
- Honda has already confirmed it plans to stop production in Japan of the hybrid version of the Civic hatchback built for the US market.
- The tariffs on imported cars took effect on April 3.
- Ford previously announced an "employee pricing" discount offer for buyers on most of its vehicles on April 3, the day the tariffs took effect.
- Car prices may soar as supply shrinks, following a trend seen in 2021 when a global shortage of computer chips sent average new car prices 17% higher.
- However, experts think demand for cars may not be as strong due to a combination of factors including weaker consumer confidence, fewer buyers rushing to beat the tariffs, and the ongoing economic impacts of the pandemic.
- The ongoing trade war between the US and other countries has significant implications for the business and manufacturing industries.
- The finance industry is closely watching the tariffs and their impact on consumer spending.
- The energy industry could also feel the effects of the tariffs, as costs for building cars and cars themselves rise.
- Aerospace companies may also be impacted by tariffs, as the costs of building and importing aircraft could increase.
- The retail industry will likely be impacted by the tariffs, as consumers face higher prices on cars and potentially other goods.
- Transportation costs for both businesses and consumers could rise as a result of the tariffs.
- The tariffs could have a ripple effect on the housing market, as reduced spending on cars could lead to changes in home-buying patterns.
- Personal finance and banking and insurance industries will need to adapt to changing economic conditions caused by the tariffs.
- Real estate investors will need to take the tariffs into account as they make investment decisions.
- Data and cloud computing industries could see increased demand for solutions that help businesses and consumers manage increased costs.
- The technology industry may need to adapt to changing economic conditions, as well as innovate new solutions to help businesses and consumers navigate the tariffs.
- The travel industry will also be impacted by the tariffs, as consumers may rethink summer road trips and opt to stay local due to higher car prices.
