Philadelphia-area car dealers say Trump's tariffs likely to drive up prices on foreign, domestic cars
President Trump's 25% tariff on all imported vehicles went into effect at midnight. Dealers across the Philadelphia area, both imports and domestic, have taken notice.
"If you're selling cars right now, you're going to be negatively impacted," said David Kelleher, president of David Dodge, Chrysler, Jeep, Ram in Glen Mills.
The tariffs are meant to target foreign-made cars coming into the United States, which account for nearly 50% of all vehicles sold in America in 2024, according to the White House. They would have a direct impact on places like Garnet Volkswagen in Glen Mills.
"A $35,000 Tiguan, we can do the math, 25% of that could be $7,000," said Nick James, general sales manager at Garnet Volkswagen.
James says the dealership did see people surging in over the last month looking to beat the tariffs, and that "everyone" did well among the dealerships along Route 202.
But the impact likely won't be limited to new Volkswagen vehicles. The White House is planning another round of 25% tariffs on many foreign-made auto parts starting May 3. That could drive up the price on any already-owned vehicle that comes in needing service or repairs. It's something James says the dealership may look to get ahead of.
"A lot of dealers like us are looking at buying more parts now, so hopefully we can have a backlog of parts that are not tariff hit," James said.
Both Garnet Volkswagen and David Dodge, Chrysler, Jeep, Ram told CBS News Philadelphia they have around a 90-day stock of cars on their lots that would not be subject to tariffs. That means, if you buy off the lot, those price increases shouldn't be seen immediately.
The White House, in late March, called foreign auto imports a "critical threat to U.S. national security." Mr. Trump has touted the tariffs as a way to push foreign companies to move production to the United States, and spur people to buy American-made vehicles.
Mr. Trump's move earned the support of the United Auto Workers. In a March statement, the union said, "We applaud the Trump administration for stepping up to end the free trade disaster that has devastated working class communities for decades."
Mr. Trump even had a retired UAW worker from Michigan speak during his tariff announcement this week.
But while Mr. Trump's push may be to buy American, domestic dealerships say they likely won't be spared from price hikes.
"This impact is across the board," Kelleher said.
Just down the street from Garnet Volkswagen, Kelleher at David Dodge, Chrysler, Jeep, Ram says, for many cars, it's not as simple as saying something is American-made. He gave CBS News Philadelphia the example of something like the popular Jeep Grand Cherokee.
"That grand Cherokee out there is assembled in Detroit. But 25% of the parts come from other countries," Kelleher said. "[A] $45,000 Grand Cherokee, probably go up $3,000 to $4,000."
There are other vehicles under the Jeep, Dodge, and RAM names that are wholly assembled overseas and would be subject to the full 25% tariff. The Dodge Hornet, according to Kelleher, is made in Italy. Some heavy-duty RAM pickups are built in Mexico. As is the Jeep Compass.
"When you think about my $30,000 Compass becoming a $37,500 Compass, that's a difficult proposition," Kelleher said.
If those prices do indeed rise like that, Kelleher says it could force him to stop ordering those cars.
Used cars, whether foreign or domestic, could also see prices jump. Dealers say if people see higher prices on new cars, they could look for a cheaper option, which would drive up demand.
Dealers also talked about the lack of clarity from the White House on the tariffs, particularly when it comes to the auto parts. Some parts could be protected under the United States-Canada-Mexico trade agreement under Mr. Trump's first term, meaning they wouldn't face tariffs. But dealers say that's all still unclear.
"We don't even know all the rules of the game right now," said Kelleher. "They put this out there and it's immediately in effect, but even the manufacturers don't quite understand all the rules."
Kelleher also believes these tariffs will have an impact on jobs across the auto sector. Stellantis, which owns brands like Jeep and Ram, announced Thursday it was temporarily pausing production at two plants in Canada and Mexico, a move that will reportedly result in the temporary layoff of 900 U.S. employees.
Kelleher says if the tariffs drop demand for cars, dealerships will have also "have to take a hard look" at doing the same. He says, whether it's a domestic or import dealer, that would impact U.S. workers.
"These are American dealers who employ Americans," Kelleher said. "They're going to be impacted in a really difficult way."
