Tariffs on car imports could raise prices by nearly $7,000
NEW YORK -- At his Honda dealership in Queens, New York, general manager Brian Benstock is warning customers and employees that price hikes could be coming.
"We're always telling our customers to buy now," he said. "Now is a good time. Prices are gonna go up. Potentially go up. But to put some fear in the market. And fear is not a good thing."
The proposed 25 percent tariff on imported cars and auto parts from Europe and elsewhere could give buyers sticker shock. Consumers could be shelling out nearly $7,000 more per vehicle. The Honda Civic could cost an extra $1,100. The Ford Escape up nearly $1,600 and the Audi Q5 could run nearly $6,000 higher.
It's not just customers shopping for cars that will feel the impact. The entire auto sector could take a hit. According to an industry study, the impact of tariffs could have the opposite effect of helping the U.S. car and parts industries. A 25 percent tariff on automotive and parts imports could lead up to 2 million fewer U.S. vehicle sales and could cost as many as 117,500 auto dealership jobs.
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"Twenty percent of the U.S. economy is based on the automobile business," Benstock said. "Whether that be insurance companies, advertising, banking, every industry is impacted when we sell less cars."
"When we put tariffs on top of an already accelerating inflation rate, it starts to put pressure on the consumer. That's what economists are worried about," said Jill Schlesinger, CBS News financial analyst.
Last year, 44 percent of all U.S. car sales were from imported vehicles. The Department of Commerce is still investigating whether to enforce these proposed tariffs and aren't expected to wrap up its investigation for at least another two months.