What impact will new tariffs on imported cars, parts have on Tennessee?

Yahoo

02-04-2025

KNOXVILLE, Tenn. (WATE) — The price of an imported car could increase as the President plans to implement a 25% tariff on foreign automobiles and parts this Thursday.
The impact is projected to be felt by the end of this month, according to Maryville College Political Science Professor Mark O'Gorman.
'There might be long-term gain but boy, there's going to be some short-term pain because the transition is going to be really difficult,' he said.
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O'Gorman said nearly every car manufacturer, dealership and repair shop could feel the impact of a 25% tariff placed on imported cars and their parts.
'Every dealership that's selling imported cars and every repair shop, regardless of what it does in terms of repairs [on] foreign cars, is definitely going to be impacted,' said O'Gorman. 'Like anything, it'll probably be the mid and smaller size repair shop that's going to feel the biggest impact because they just don't have the ability to kind of keep as much inventory.'
While this could lead those in the automotive industry to increase their prices, he said smaller dealerships and repair shops may also struggle to buy the parts themselves.
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'Because there's still going to be a bit of a lag between when the smaller dealership is buying this material and when they can recoup that cost from repair X and Y and Z down the line,' said O'Gorman.
In talking to a number of locally-owned dealerships, they said the full effect of these tariffs are yet known at this time. However, given the majority of them sell used vehicles, O'Gorman said they may see a spike in customers.
'Those might become more attractive options, maybe going down that road rather than a straight new car, given the tariffs,' he said.
However, if you are looking to repair your vehicle, O'Gorman added the parts may cost the customer more.
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'Obviously, the parts are going to be more because they're having to pay more to bring the parts in to say, Asian car dealer here in the Knoxville area or an Asian or European car dealer in East Tennessee. Those parts are going to cost more. That will be part you'll see an increased price in your repair bill,' he said.
While the full impact will not be known until the tariffs are implemented, he said this could impact the global supply chain, However, the White House asserted this could bolster domestic industrial base.
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