So far President Trump’s trade polices have had almost no effect on new car prices. But almost no one expects that to last.
By the end of the year, if not sooner, tariffs as much as 27.5 percent on cars and car parts will force sticker prices to rise significantly, analysts say, pushing new vehicle purchases out of the reach of many Americans.
Tariffs have already chopped billions of dollars from carmakers’ bottom lines. That is because the companies, fearful of losing sales, have absorbed most of the burden of Mr. Trump’s new duties rather than passing it on to car buyers. The carmakers also haven’t been hit by the full force of tariffs yet. Many dealers and manufacturers stockpiled cars and parts before the tariffs took effect.
“We haven’t raised prices due to tariffs, and that’s still our mantra,” Randy Parker, the chief executive of Hyundai and Genesis Motor North America, said in an interview this month.
That is good news for Mr. Trump and Republicans in Congress because it insulates them from the political consequences of higher sticker prices, which would also contribute to inflation.
Carmakers “will try to hold prices and focus on cost reduction for as long as they can,” said Lenny LaRocca, a partner at KPMG who leads the consulting firm’s work with the auto industry.
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The post Car Companies Are Paying Tariffs So You Don’t Have To appeared first on New York Times.
