There are fresh concerns that the price of a new car could go up following the latest round of U.S.-imposed tariffs that are raising the levies on aluminum and steel from 25 per cent to 50 per cent.
President and CEO of the New Car Dealers Association of BC Blair Qualey tells 1130 NewsRadio that the sector is already under considerable strain, and the tariff increase doesn’t help.
“It means a lot for the manufacturers who are building vehicles in the United States. They’re the ones who are going to feel the brunt of that double tariff on steel and aluminum,” he explained.
“Of course, if folks in Canada and British Columbia are purchasing vehicles that are made in the United States, then of course, there will be that extra tariff added to the price of vehicles. It’s just more pain.”
He says that ultimately, the consumer will usually always pay more.
“A lot of the manufacturers have tried their best to load up on inventory as we knew these tariffs were coming … so manufacturers loaded up with inventory of parts and various things. Some of them are doing their best to absorb some of the tariffs, but that won’t be able to last for too much longer. And at a certain point, sooner than later, the price pain is going to filter its way downstream and wind up in the lap of the consumer,” Qualey explained.
There are no specific tariffs on car parts, but most are made with steel and aluminum, so Qualey suggests car owners should be mindful of that if they need repairs.
“If a part for a vehicle is made in Canada and comes from the United States … then that will also have a tariff on it and I think everybody is trying to sort out a number of parts that are manufactured and portions of vehicles before they get added to the final assembly that go back and forth across the Canada, U.S., and Mexico border many times. We’re still trying to sort out if the tariffs are stacking on all of those trips back and forth and how that’s going to work out,” he said.
Qualey warns things could go sideways if any Canadian parts makers can’t keep up or they end up going under.
“[There are] a number of smaller parts manufacturers in Canada and the U.S., and if one or several of those wind up in trouble because they can’t afford all the extra financial pain that’s coming from these tariffs, they might wind up going out of business. And that’s happened in the past,” he said.
“The challenge is that many manufacturers may use the same supplier for parts, and if one supplier goes down, that can drastically impact the manufacturer of vehicles. It’s a complicated, convoluted situation with pain around every corner, it seems.”
He says the initial 25 per cent tariff, including reciprocal ones from Canada to the U.S., would add roughly 12.5 per cent to the cost of vehicles.
“We’re starting to hear some of that is kicking in now, and I encourage anybody who’s thinking about it you get a hold of your car dealer and ask them what’s happening with the brands they service and what the pricing situation is going to be.”
Qualey says he’s hearing there is current availability of new car vehicles, but he’s not sure how long any stock will last.
He adds the premier and other politicians in Victoria know their concerns, and Qualey is urging them to take action to help cool concerns.
“[We want them] to look at a PST holiday on new vehicles, cars, and trucks to help support consumers who need to get a new vehicle and might not be able to take on that extra cost.”
Qualey also wants the province to revisit the electric vehicle rebate program and address the so-called ‘luxury tax.’
“[That tax] kicks in at $55,000 on a new vehicle, while the average price of a new vehicle in Canada now is $66,000. Everybody forgets it hasn’t been adjusted, I think 20 years ago, and it hasn’t been adjusted since then and we’ve had a lot of inflation and a tremendous amount of value in terms of technology and new systems, safety systems and radars, and other things that are available in Canada today.”
Prime Minister Mark Carney described this latest round of tariffs as “unjustified, illegal,” and he says they are bad for both American and Canadian industry.
“We will take some time, not much, because we are in intensive discussions right now with the Americans on the trading relationship. Those discussions are progressing. I would note that the American action is a global action, it’s not one targeted at Canada.”
Carney did not provide a timeline for, or how, Canada will respond.
With files from Michael Williams.
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