How Tariffs Could Impact Your Dream Car and Project Car Plans - FL5 Civic Type R Therapy Drive

About this video

• Video Title: How Tariffs Could Impact Your Dream Car and Project Car Plans - FL5 Civic Type R Therapy Drive
• Channel: Tedward
• Speakers: Tedward
• Duration: 18:58

Overview

This video discusses the potential financial impact of new US tariffs on car prices and the automotive industry. The speaker explains how these tariffs could affect both new and used car markets, as well as the production and purchasing decisions of manufacturers and consumers.

Key takeaways

• Tariff Impact on Car Prices: New tariffs, potentially effective April 2nd in the US, are expected to increase the prices of cars and car parts not manufactured or assembled in the United States by approximately 25%.
• Manufacturer's Dilemma: Automakers face a challenge in deciding how much of the tariff increase to pass on to consumers. Passing on the full amount could drastically reduce sales and be detrimental to business, while absorbing the cost would impact profit margins.
• US Production vs. Parts: While some manufacturers have factories in the US, they still often use parts imported from other countries. This means even US-assembled cars could be subject to tariffs on their components.
• Consumer Behavior Shift: Increased prices due to tariffs may push consumers out of the new car market, potentially driving up demand and prices in the used car market as well.
• Market Uncertainty: The historical instability of US tariff policies creates uncertainty for manufacturers, making significant investment in US-based production less appealing. The long-term economic effects and consumer reactions are also unknown.