Detroit's auto industry nervously watches, waits as tariff deadline fast approaches
The Brief
President Trump's tariff deadline is April 2nd, causing uncertainty among Detroit automakers.
The tariffs are a proposed 25% on vehicles and auto parts imported into the U.S.
"If the auto industry catches a cold, Detroit gets pneumonia," says John McElroy.
FOX 2 - From price hikes to possible supply chain disruptions, Detroit's auto industry continues to brace for Wednesday's tariff deadline.
These tariffs may result in car prices going up and sales down along with possible supply chain disruptions. It would be the domino effect from President Donald Trump's 25 percent auto import tariffs which loom over Metro Detroit.
"If the auto industry catches a cold, Detroit gets pneumonia," said John McElroy, auto industry expert. "We depend so heavily on the automotive industry, that if it gets impacted, Detroit and Southeast Michigan feels it the most."
Big picture view
The result would trickle down to customers - with Metro Detroit families already struggling to afford new vehicles due to the economy.
"The industry has priced millions of households out of the new car market, and these latest tariffs are going to push even more household out," he said.
George Glassman, president of Glassman Auto, says it's why his lots have been so busy lately.
"Customers are coming out they're calling, and they're interested in making sure that they buy a car in anticipation of the tariffs kicking in," Glassman said.
He says his team is unloading cars, beefing up new and used inventory, anticipating rising costs.
"We are in a decent position as we speak, but I've got no doubt that inventory will wind down pretty quickly," Glassman said. "The challenge right now is that we don't yet have any official pricing from any manufacturers."
McElroy says the big three manufacturers won't go unscathed. But he adds, that German, Japanese, and Korean manufacturers will feel the most pressure, given their models aren't made with many U.S. auto parts.
But how that will be checked and enforced is still unclear.
"Yes, automakers will be forced to build more vehicles in the U.S.," said McElroy. "But I think when all the dust settles, we will have some (increased) amount of American manufacturing jobs."
While the tariffs technically take effect April 2, auto experts say it may still take months, most likely around the summertime, when we truly start to feel the impact on car sales on lots like this one.
While things are still uncertain, they say don't be surprised to see a bump in car payments, and even your car insurance.
The Source
Information for this story came from interviews with George Glassman and John McElroy.
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