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Maine’s largest car dealer is bracing for higher sticker prices and lower sales once the 25% tariff on all U.S. car imports and certain foreign-made parts takes effect this week.
The measures are aimed at protecting America’s automobile industry from “excessive imports threatening America’s domestic industrial base and supply chains,” President Donald Trump said in last week’s announcement.
Over the weekend, the Republican said in a television interview that he “couldn’t care less” if automakers raise prices in response to the tariffs.
While Lee Auto Malls, Maine’s biggest auto dealer with several new and used-car locations, is well-stocked for the next couple of months, Chairman Adam Lee said he’s worried about tariff-related price increases and supply shortages in the longer term.
“Right now most dealers have some supply of inventory on their lots, but those are pre-tariff,” he told Mainebiz in a phone interview last week. “Depending on how many cars you have, those will last a month or two, but after that it will be absolutely devastating to car dealers, to the consumers and really to the economy.”
The tariffs are set to take effect Wednesday and start to be collected as of Thursday.
For Lee Auto Malls, the new import taxes come just as the family-owned firm starts to regain its footing following lower sales volume and revenues in February.
“I’m not worried about March,” Lee told Mainebiz last week. “I’m worried about after March.”
He said that Lee Auto Malls has about a two-month supply of Hondas and Toyotas with cars coming in every day, and about three months’ worth of Jeeps and Ram Trucks.
However, Lee warned that a 25% tariff will increase the average price of imported cars from $50,000 today to around $62,000 and inflate the average price of trucks from $60,000 to $70,000 to around $85,000 to $90,000.
“People will stop buying cars because they can’t afford them,” he warned.
Buyers could turn to the used car market, but increased demand may affect those prices as well, he said.
The 9,400-member American International Automotive Dealers Association uses a similar argument in urging political leaders and trading partners "to come together to negotiate a swift and practical end" to the tariffs.
"Tariffs can play an important role in balancing trade relationships and ensuring national security, but increasing barriers to trade also put added pressure on the wallets of American families," the Alexandria, Va.-based trade group said last week. "In this case, tariffs could directly contribute to thousands of extra dollars on sticker prices."
At the other end of the supply chain is VIP Tires & Service, an Auburn-based automotive service provider and tire dealer with 76 locations across New England including 36 in Maine. The head of the company anticipates an initial business boost from higher car prices.
“When people aren’t buying new cars and keeping old cars running longer, that’s typically good for the repair business and the tire business,” Tim Winkeler, the company’s president and CEO, told Mainebiz by phone on Monday.
“We don’t necessarily think tariffs are objectively a good thing, but if it gets more vehicles built in the U.S. that’s probably not a bad thing.”
He also predicts higher prices in the short term on auto parts, many of which are imported from Mexico and China.
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Learn moreThe Giving Guide helps nonprofits have the opportunity to showcase and differentiate their organizations so that businesses better understand how they can contribute to a nonprofit’s mission and work.
Work for ME is a workforce development tool to help Maine’s employers target Maine’s emerging workforce. Work for ME highlights each industry, its impact on Maine’s economy, the jobs available to entry-level workers, the training and education needed to get a career started.
Whether you’re a developer, financer, architect, or industry enthusiast, Groundbreaking Maine is crafted to be your go-to source for valuable insights in Maine’s real estate and construction community.
Coming June 2025
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