Car dealerships across the U.S. reported a surge in sales in the weeks leading up to the implementation of new tariffs by Donald Trump, a new report shows.
Why It Matters
The White House imposed a sweeping 10 percent baseline tariff on all imports Wednesday, with even steeper rates for countries running large trade surpluses with the U.S. While Mexico and Canada are exempt from this new round, previous 25 percent tariffs on both remain in effect. A separate 25 percent tariff on all imported vehicles has also been enacted.
Economists warn the tariffs will likely raise prices on everyday goods.
What To Know
New-vehicle sales surged in March, suggesting American consumers rushed to buy cars ahead of sweeping tariffs imposed by President Donald Trump, according to new data from Cox Automotive. The last-minute buying frenzy drove March sales to 1.59 million units—up nearly 30 percent from February and marking the strongest month for auto sales in four years.
Meanwhile, the seasonally adjusted annual rate (SAAR) is now estimated at 17.8 million, far surpassing expectations.
Industry analysts say the spike was fueled by fears that the new 25 percent tariffs on imported vehicles—and parts used in U.S. manufacturing—would soon drive up car prices across the board.
The report warns that popular, lower-priced vehicles like the Toyota Corolla, Honda Civic, and compact SUVs such as the RAV4 and CR-V are especially vulnerable under the new tariff structure. Even cars assembled in the U.S. that rely on foreign parts could see price increases of 10–15 percent, Cox Automotive said, while those not directly affected may still face a 5 percent bump due to broader market pressure.
“The auto market is absolutely heading into uncharted territory, a rough road indeed,” Erin Keating, executive analyst at Cox Automotive said.
Looking ahead, analysts expect sales to remain strong in April and May while pre-tariff inventory lasts. But by the summer, as inventories shrink and higher costs take hold, the auto industry may slow down significantly, the report warns. Cox Automotive has already lowered its full-year forecast for U.S. vehicle sales from 16.3 million to 15.6 million.
The report follows Trump’s “Liberation Day” tariffs, announced this week, which sent markets into meltdown. The tariffs—which the president says will bring manufacturing jobs back to the U.S.—encompassed a broad swath of countries: a 34 percent tariff on Chinese imports (in addition to 20 percent tariffs imposed earlier this year), 25 percent on South Korea, 24 percent on Japan, 20 percent on the European Union and 32 percent on Taiwan.
Economists have also warned that the tariffs will cause prices of everyday goods to increase, not just cars.
Shortly after Trump’s announcement, billionaire businessman Mark Cuban told his social media followers they should consider buying “lots of consumables now” before prices rise.
“From toothpaste to soap, anything you can find storage space for, buy before they have to replenish inventory,” Cuban wrote on the Bluesky social media platform.
Cuban added: “Even if it’s made in the USA, they will jack up the price and blame it on tariffs.”
A CreditCards.com survey from February, which found that one in five Americans were purchasing more items than usual, primarily due to concerns over Trump’s tariffs, suggests panic-buying began long before Trump’s announcement this week.
After Trump’s announcement this week, Ron Lieber, the Your Money columnist for The New York Times, warned that this is not the time for panic-buying.
“These tariffs may not persist at anything like the amounts currently in the headlines,” Lieber wrote, adding: “You also need to have real money—extra real money—to lay a bunch of things away in your residence. Many people don’t, and going into debt to buy extras of everything will probably erase any savings.”
Trump’s tariffs have also sparked fears of a recession this year.
On Monday March 31, Goldman Sachs raised its odds of a recession in 2025 to 35 percent, up from 20 percent previously. That is the company’s highest recession probability since the regional banking crisis two years ago.
What People Are Saying
Erin Keating, executive analyst and senior director of economic and industry insights at Cox Automotive, wrote: “With additional tariffs likely pushing prices higher across the broader economy, per a Rose Garden ceremony on April 2, the auto market is absolutely heading into uncharted territory, a rough road indeed. We will do our best to provide perspective on this story as it continues to unfold.”
What Happens Next
Trump’s 10 percent “baseline” tariff went into effect on Saturday and his “discounted reciprocal” tariffs kick in on April 9.
The post Car Sales Skyrocketed Before Trump Tariffs: ‘Uncharted Territory’ appeared first on Newsweek.
