Car dealers in South Florida plan how to respond to Trump’s tariffs on imported cars, auto parts

A 25% tariff on auto imports took effect Thursday and car dealerships in South Florida had not felt the impact except for a rush to buy now before the prices change.

Brickell Motors, a car dealership in Miami, has a new and used inventory that includes Japanese cars. Most cars are assembled in North America with parts made overseas.

“If you look at the details, the parts are 25% percent made in Mexico, 60% U.S., Canada, so if you combine North America, you have 85% of what you think is a Japanese car,” said Ray Zoila, a sales manager at Brickell Motors.

Aside from Japan, the majority of the imports are from Germany, Mexico, and South Korea. The inventory in stock and Monroney price labels were unaffected by tariffs on Wednesday.

“The tariffs are only on cars that are on their way in, not on cars on the ground,” Zoila said.

The fear of an inflationary spike alone can influence consumer behavior, so retailers’ prices may go up even before the tariffs’ true impact is felt. Zoila said this applies to the luxury market.

“A lot of it is sentiment, what people feel, it’s not so much the reality of it,” Zoila said adding a colleague selling Mercedes-Benz had “a huge weekend.”

Fear affected stock markets worldwide Wednesday afternoon, as President Donald Trump disrupted the global trading system that has been in place for decades.

Trump’s new tariffs on foreign goods range from the 10% baseline to 49%. Including, 20% for the European Union, and 25% for Canada and Mexico.

As negotiations continued, Zoila said it was too early to tell what the outcome will be and when the dealerships have to react to the conditions in the marketplace.

“Trump changes his mind too often, so it’s kind of like a wait-and-see,” Zoila said, adding that car dealerships in South Florida are resilient.

To adapt to economic changes, Zoila said car dealerships can opt to focus on rebates, financing, credits, and other incentives to help move inventory in the future.

The Federal Reserve could cut interest rates. After the U.S. Customs and Border Protection agency sends the tariffs collected to the U.S. Treasury, the Republicans in Congress could use the revenue to offset taxes in the U.S.

Economists say importers will be passing on the cost to consumers to avoid affecting profitability, so most consumers will opt for cutting back on purchases.

Tariffs on auto parts have yet to start. Black markets may also be gearing up to adapt, and there are expanded trade penalties on countries that are importing oil from Venezuela.

According to the White House, the 10% tariff on all countries starts on Friday, and “an individualized reciprocal higher tariff” next week.

The Trump administration estimated that last year about 50% of the cars sold in the U.S. were imported, 35% were “Made in America” and the trade deficit in auto parts reached $93.5 billion.

Hoping for more jobs, The White House has the support of United Auto Workers. In a statement last month, the UAW saw the tariffs as the beginning of the end of “the free trade disaster” that moved jobs to “high-exploitation, low-wage countries.”

According to the White House, the tariffs will continue until Trump determines “that the threat posed by the trade deficit and underlying nonreciprocal treatment is satisfied, resolved, or mitigated.”

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