- 25% tariffs are set to take effect on imported cars and auto parts coming into the United States.
- One local used car dealership said they have already seen increased wholesale prices and part costs.
- Watch the video to see how they are adapting to these impacts and how they are planning to navigate the road ahead.
BROADCAST TRANSCRIPT:
Thursday is expected to bring new tariffs on imported ca and auto parts coming into the U.S. The tariffs are causing local businesses to try to get ahead of possible impacts. One family-owned business explained how they plan to do that and an economic expert weighs in on potential local impacts of these tariffs.
27 Auto Sales is a family-owned used car dealership business that's been around for over 25 years. While new 25% tariffs are set to take effect Thursday on imported cars and auto parts coming into the U.S., this family said, they've not deterred.
"We're uncertain of what the future has to hold for us and we prepare ourselves as much as we can," said Kareem Elsaka, Vice President of 27 Auto Sales. He added they are already noticed wholesale prices and part prices increase — that's actually driven customers to their lot.
"We've seen consumers rush in to purchase vehicles worried that the car prices are going to increase 25%," said Elsaka.
Trying to navigate potential impacts, Elsaka said they have also changed their business model by opening up their own reconditioning facility.
They now do their own repairs, no longer outsourcing work to tire shops or external mechanics.
"We're trying to keep our overhead as low as possible, because at the end of the day, that's what gives the discounts to our customers and we're going to stick to it and we're going to keep doing it," said Elsaka.
The White House has cited 3 main reasons for introducing these tariffs including boosting domestic production, improving America's manufacturing industry, and strengthening national security — something that Economics Professor Randall Holcombe of Florida State University believes could be a benefit of these taxes.
"One way possibly to look at these tariffs is Trump is imposing them so down the road they can use them as a negotiating tool," said Holcombe.
However, Holcombe said he doesn't believe much good can come out of the tariffs for local businesses.
"The uncertainty alone is a deterrent to investment and it's going to slow down the economy so that's a problem," said Holcombe. "Normally the stock market is an leading indicator of economic activity. We've seen the stock market fall as Trump continues to threaten the tariffs so I wouldn't be surprised if we saw a recession later this year."
Elsaka said they'll keep adapting to ensure reliability for his customers.
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