US car sales are in a roller coaster state: chain reaction triggered by chaotic tariffs

According to the latest analysis by industry experts at Cox Motors, it is expected that new and used car prices in the United States will significantly rise this year under President Donald Trump's 25% car tariffs.

Trump previously stated that he would impose a 25% tariff on imported cars, which will take effect on Thursday, and is expected to impose an additional 25% tariff on car parts before May 3rd. Cox Automotive, an automotive data and consulting firm, predicts that these tariffs will increase the cost of new cars and trucks (both imported and domestically produced) by thousands of dollars, while also pushing up used car prices, a magnitude greater than previously anticipated. The company stated that although sales may slow down compared to previous expectations, these price increases are inevitable.

Currently, various automobile manufacturers are responding to tariffs in multiple ways. Most of them are domestic manufacturers in the United States, such as Chrysler's parent company, which has announced temporary agreements for employee pricing, while other manufacturers, such as British automaker Jaguar Land Rover, have stopped shipping in the United States. Hyundai also stated that it will not raise prices for at least two months to alleviate consumer concerns.

Jonathan Smock, Chief Economist of Cox Motors, describes the current automotive market as a "roller coaster ride" due to the country's regulatory environment and economic uncertainty affecting consumer purchases, resulting in fluctuating demand. He said at a virtual event on Monday, "We expect that with the passage of tariffs and tight supply, discounts will decrease and prices will accelerate, leading to price increases for almost all new car models. In the long run, we expect production and sales to decline, new car prices to rise, and some models to be phased out

Regarding the new car, Cox Motors estimates that the cost of imported vehicles will increase by $6000 due to a 25% tariff on non-U.S. assembled vehicles, and the cost of vehicles assembled in the United States will increase by $3600 due to the upcoming 25% tariff on automotive components. In addition, due to the previously announced steel and aluminum tariffs, costs will increase by $300 to $500. According to Wall Street analysts, car manufacturers and suppliers may be able to bear some of the cost increases, but they also expect to pass on these costs to American consumers.

In terms of second-hand cars, although Trump's series of tariff policies will not directly affect the sales of second-hand cars, changes in the price, production and demand of new cars will still affect the second-hand car market, because this is the way most Americans buy cars. Ryan Rolman, CEO of Indiana based Roman Motor Group, described the current used car market as unstable, even stating that it is similar to the chaos during the global health crisis. We see that our wholesale car quantity is indeed increasing, but the problem is that we cannot obtain as many used cars as retail cars, which forces us to go to auctions. This drives up car prices in the neighborhood, which is a terrible thing, "said Rolman, whose company specializes in new car sales and selected used cars.

With the implementation of the Trump administration's tariff policies in the United States, automobile manufacturers around the world are looking for ways to cope. Although some car manufacturers are expected to reduce production during the tariff period and some have decided to stop importing to the United States, due to other market conditions, these actions are not expected to be as aggressive as in the early 2020s. However, the skyrocketing prices of cars will still cause consumers unbearable suffering.