Car Buyers Flocked to Dealerships To Beat Auto Tariffs
The jump likely represented buyers rushing to purchase vehicles before President Donald Trump's 25% tariff on imported cars goes into effect.
Economists expect auto sales to drop off after the tariffs take hold, as they could add thousands of dollars to the cost of new vehicles.Auto sales surged in March as car buyers raced to beat President Donald Trump's 25% tariff on imported cars and trucks. Wards Intelligence said Tuesday that U.S. dealers sold 17.8 million vehicles at a seasonally adjusted annual rate in March, more than January and February combined. The more-than-10% jump in sales led to the fastest monthly pace in nearly four years.
The increase was likely due to shoppers buying before Trump's tariffs on imported vehicles goes into effect Thursday, analysts said. The tariffs, announced last week, could add thousands of dollars to the cost of new vehicles, economists have estimated."March sales were proof that U.S. consumers are very much paying attention to tariffs," Haig Stoddard, senior industry analyst at Wards, wrote.The surge in purchases highlights the impact of tariffs on consumers' decision-making. Economists at Cox Automotive predicted sales would drop off sharply after the tariffs were imposed, reversing the initial surge."We expect vehicle sales to fall, new and used prices to increase, and some models to be eliminated if tariffs persist," Jonathan Smoke, chief economist at Cox Automotive, wrote in a commentary last week.Experts said consumers can also expect higher prices for domestically made cars, used cars, car repairs, and insurance as the tariffs ripple through the auto industry.The auto tariff is just one of the import taxes in President Donald Trump's tariff-heavy trade policy, which he has rolled out over the past month, with a fresh round of tariffs set to be announced Wednesday afternoon. Trump has said the main goal of the import taxes is to restore American manufacturing by encouraging companies to produce goods in the U.S. to avoid the taxes.Numerous economists have predicted the tariffs, depending on how high they are and how long they stay in place, will instead push up the cost of living and slow the economy, potentially leading to a painful combination of slow economic growth and high inflation called "stagflation."
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