OKEMOS, Mich. — As the Trump administration’s 25% tariffs on automobiles and certain auto parts approach their April 2nd implementation date, the auto industry is left grappling with questions about what the new trade measures will mean for car dealerships, manufacturers, and consumers.
At Graff Dealerships in Okemos, which sells Nissans and Chevrolets, the uncertainty surrounding the tariffs has led to a flurry of activity as dealerships work to manage inventory. According to Matt Sloan, a representative with Graff Dealerships, the tariffs could have a significant impact on both the availability of vehicles and their prices. However, with little concrete information on how manufacturers will respond, Sloan remains cautious about making predictions.
“From an inventory standpoint, it could affect things; it could affect pricing, but again we don’t know exactly how,” Sloan explained.
The tariffs, which are set to impact imported vehicles and auto parts, could have a complex effect on pricing. Sloan noted that while some cars sold at Graff Dealerships are made in the U.S., others are imported. The response from manufacturers could vary, with some absorbing the tariff costs while others may increase vehicle prices to account for the additional expense.
“Some may take that increase and put it on that exact vehicle. Some may spread it across the board on all the lines,” Sloan said.
To prepare for potential disruptions, Graff Dealerships has been ramping up inventory, opting to receive more vehicles without engaging in trade exchanges with other dealerships. Sloan indicated that this strategy was necessary to stay ahead of any price hikes and ensure a steady supply for customers as the tariffs take effect.
“Rather than wait until the price might go up, let’s do it now and get it taken care of,” Sloan said. “So we’ve had some increase in business because of that.”
Beyond the dealerships, industry experts are also voicing concerns about the ripple effects of the tariffs. Amy Broglin-Peterson, a supply chain expert and professor at Michigan State University, pointed out that while many well-established automakers have domestic production options, the real risk lies in auto parts. Some critical components are not produced in the U.S. and are frequently traded between countries, which means they could face multiple tariff fees before even being assembled into a finished vehicle.
“What that really equates to is a lot of tariff costs finding their way into the eventual finished vehicle piece price,” Broglin-Peterson said. “That’s what’s really going to sting.”
Broglin-Peterson emphasized that higher prices are a likely outcome, but noted there could also be benefits to boosting domestic production as a result of the tariffs. While acknowledging that rising costs might burden consumers, she argued that increasing the U.S. manufacturing footprint could help mitigate risks associated with global supply chain dependence.
“I think we’ve forgotten what it was like to have shortages of things we really need as a society,” Broglin-Peterson said. “And I think the government has realized that that’s a dangerous position to be in.”
Despite the challenges, dealerships like Graff Dealerships remain focused on adapting to the changing landscape. Sloan echoed a sentiment that many in the industry are likely familiar with — figuring out how to move forward, regardless of the obstacles.
“We figure out how to get past it, move on, and sell cars,” he said.
The American Automotive Policy Council (AAPC), representing major automakers including Stellantis, GM, and Ford, also weighed in on the matter. In a statement, the AAPC reiterated its commitment to President Trump’s vision of increasing U.S. automotive production and creating more American jobs. However, the council stressed the importance of implementing tariffs in a way that would avoid driving up consumer prices or disrupting the competitive balance of the North American automotive sector. This, they noted, is crucial for maintaining the success of the USMCA trade agreement.
As the clock ticks down to the tariff implementation, the auto industry finds itself in a period of uncertainty. While manufacturers, dealerships, and experts continue to analyze the potential effects, one thing remains clear: the road ahead will require adaptation and careful navigation as the tariffs reshape the automotive landscape.
