Welcome to the Daily 5 report for Friday, March 28.
President Donald Trump’s upcoming 25 percent tariff on imported vehicles is being viewed by most experts as a long-term threat to the U.S. auto industry’s health, but next week we’re expecting to see some significant short-term boosts in March and first-quarter sales reports.
Dealers know they have a significant short-term opportunity in the coming days to sell imported vehicles. One Subaru dealership in Michigan told its customers in an email to be ready for likely price increases when the tariff is implemented April 3: “If you’ve been considering a new Subaru, now might be the time to act before these price increases hit. Our team is ready to assist with current inventory, pricing, and financing options to help you stay ahead of this shift.”
Read more: Live updates on tariff news and impacts
Any dealership with imported vehicles on its lot, particularly luxury brands, should be spending the weekend touting inventory at current prices.
Our story by Vince Bond Jr. says Cox Automotive believes some consumers may have been influenced to buy because of the planned tariffs, but also surmised that other households are holding off because of worries about an economic slowdown. Cox cautions that tariffs could hit sales as soon as April.
“If the tariffs go through this time, by mid-April, we expect disruption to virtually all North American vehicle production, amounting to 20,000 fewer vehicles produced per day, which is about a 30 percent hit to production over the longer term,” Cox Automotive Chief Economist Jonathan Smoke said this week. “We expect sales to fall, new and used prices to increase and some models to be eliminated if those tariffs persist.”
In another tariff-related matter, UAW President Shawn Fain has never been a fan of Trump, but he can’t help but praise the Republican president’s tariffs after his union has fought against free-trade deals for some 30 years. That won’t sit well with Canada’s Unifor union, which has condemned the U.S. tariffs and faces an existential threat to its auto worker membership. Fain isn’t worried about it and said Thursday that the UAW-Unifor relationship is just fine.
“At the end of the day, there’s plenty of work to go around for all of us,” Fain said in our story today. “This is all about holding these companies accountable and making them accountable to working-class people.”
During his March 26 news conference, Trump made it clear that Tesla Inc. CEO Elon Musk doesn’t ask him for business favors. But since Tesla only sells domestically produced vehicles in the U.S., it will suffer far less pain than the Detroit 3 or other automakers. But Musk is making it plain that Tesla also faces higher costs.
“To be clear, this will affect the price of parts in Tesla cars that come from other countries,” Musk said on X. “The cost impact is not trivial.”
Tesla prices would rise by about 2 percent since roughly one-quarter of its parts would be subject to the tariff, one analyst said in this story today by Laurence Iliff. That’s under the assumption Tesla would also pass on half of its cost increase to buyers, Iliff wrote.
“As a result, Teslas would effectively appear 5 percent cheaper relative to the rest of the new-car market,” the analyst said.
As always, see our tariff live blog for a roundup of all of our coverage of this story.
That’s it for now. Have a great weekend!
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— Philip Nussel, online editor
