TRIADELPHIA — The general manager of Straub Automotive says President Donald Trump’s 25% tariffs on auto imports have resulted in a short-term demand for vehicles priced pre-tariffs and predicts a slight increase in vehicle prices in the long term.

Straub Automotive General Manager Kevin Cook said the impact on their dealership floors at The Highlands from the tariffs on auto imports that went into effect on Thursday has been “higher demand” for vehicles priced pre-tariffs. He noted the same increase in demand for used cars with parts imported from overseas.

According to the White House, Trump signed a proclamation invoking Section 232 of the Trade Expansion Act of 1962 to impose a 25% tariff on imports of automobiles and certain automobile parts. The 25% tariff will be applied to imported passenger vehicles (sedans, SUVs, crossovers, minivans, cargo vans) and light trucks, as well as key automobile parts (engines, transmissions, powertrain parts, and electrical components).

Straub Automotive sells Chrysler, Dodge, Jeep, Ram, Ford, Nissan, Honda and Hyundai vehicles. Cook said the tariffs on auto imports will impact the car dealership, as many of its vehicles are manufactured outside the country.

Cook noted that Ford trucks are made in Canada, Ram trucks are made in Mexico, a large portion of Nissans are made in Japan and Mexico and Hyundai has vehicles made in Korea and Japan. While the vehicles are built outside the country, Cook noted they may include “U.S.-made content,” such as an engine assembled and built in the U.S. and then shipped to the vehicle in Mexico for final assembly.

“The tariff will only be on the actual imported content itself – whatever is built outside the United States,” Cook said.

While consumers may only be familiar with the 25% tariff number for auto imports, Cook said vehicle manufacturers will likely spread the tariff impact “across all makes and models.” He outlined that this could mean that instead of having a 25% increase in price on a particular brand or model manufactured outside the country, consumers will see anywhere from a 1% to 7% price increase depending upon the vehicle itself and the manufacturer.

“It’s not going to have as large an impact as everyone has been concerned with,” Cook said. “The cost of tariffs is most likely going to spread out across a manufacturer’s entire vehicle line. It will not be a 25% impact on one vehicle that’s being imported – it will have anywhere from a 1% to 7% impact across the board on certain makes and models.”

Cook predicts the same price increase will occur for certain used vehicle parts made outside the country that often must be replaced.

“You start looking at brakes, tires and other things that are high wear and tear items that we recondition these cars with,” Cook said. “If those items are made outside the United States, that’s going to have an impact on used car reconditioning, which will have an impact on the ultimate price to the consumer as well.”

To prepare for the local tariff impact, Cook said Straub Automotive increased its advertising budget and became “a lot more aggressive” in getting customers through its doors before price increases occur.

“We’ve become a lot more focused on getting people in right now to buy vehicles to avoid whatever price increases we’ll start seeing in probably six to eight weeks down the road,” Cook said.

Cook also believes the auto import tariffs have already begun to foster domestic manufacturing in the country. He noted that one way vehicle manufacturers have reacted to these tariffs is by making commitments to produce more vehicles in the U.S. than overseas.

“Hyundia made a $20 billion commitment to not only produce more vehicles in the United States but also to build a steel mill in Louisiana,” Cook said. “Their [Hyundai’s] plan is to have 1.2 million vehicles built in the United States, along with increased production at the steel mill. They estimate that they will have a job growth of 104,000 [in the U.S.].”

Manufacturers are making commitments to get back to producing as much of the vehicle as they can in the United States, which is going to be very, very healthy for our economy,” Cook continued.

In addition to the eventual impact tariffs will have on vehicle costs, Cook is also keeping an eye on how the Trump administration will use tariffs as a negotiating tool to lower the costs that U.S. manufacturers are charged to export vehicles to other countries.

“Some of those tariffs are 30 to 40% to export a vehicle into another country,” Cook said. “If they [the Trump administration] just normalize what we have going out versus what we have coming in, this could have a phenomenal impact on everyone.”

In light of any possible negative impact of tariffs on the automotive industry, Cook said a current positive is that vehicles are at pre-COVID pricing, which means they are “not bringing a premium” and are discounted.

“They [vehicles] are discounted and heavily incentivized,” Cook said. “Interest rates are much better than they were two years ago. For 80 to 85% of the people financing automobiles right now, it’s going to boil down to, ‘Can I trade out of my current unit and get something to keep a similar payment?’

“That’s normally what people are looking at — what the final dollar is and if that payment can fit into their budget,” Cook continued.