Chicago car dealers brace for impact as Trump tariffs threaten price hikes

CHICAGO - One day after President Donald Trump announced a new round of tariffs, Chicago-area car dealers and their customers are already feeling the impact.

What we know:

Sales are expected to spike as customers scramble to get the remaining cars without tariffs. But prices are likely to soon go up.

"I’m looking for a new car right now," said Sal Stella, as he browsed new vehicles at a local dealership on Thursday. "My wife and I decided to trade in our minivan and go with something new."

Stella is keeping one eye on the shiny new cars, and the other on the new tariffs.

"I’m a little afraid the price will be going up, which means a higher car payment for me. I have two little kids, so that’s gonna be hard for me too," Stella said.

It’s making for unsettling times for car dealers, too, including the Hawk Auto Group in Forest Park. It’s one of 11 Hawk locations across the Chicago area employing 700 people and selling 1500 cars every month.

President Joe Crane said when it comes to new cars, most dealerships have a two-to-three-month supply on their lots that will not be tariffed, because they’re already in the country.

"My best advice would be, if you’re thinking of buying a new car in the next 30 to 60 days, now is your best opportunity," said Crane. "As you know, anything that’s currently on the ground in inventory is untariffed, so it has no increase in it."

After those cars are sold, Crane estimates the tariffs could drive up the price of new cars between five and 10%. Much of it depends on how much of that car is made of parts from countries outside the United States.

Even American-made cars generally have a significant percentage of parts that come from Mexico or Canada, which are subject to tariffs. By law, that information is included on the car’s sticker.

"Fifteen percent of the parts in this car come from Mexico. Seventy-four percent of the parts come from either United States or Canada. It’s final assembly point, Toledo, Ohio," Crane said, showing us the sticker on a Jeep.

As for used cars, which are double the size of the new car market—"We’re already seeing a rise in used car prices," said Crane. "Speculation on tariffs… That’s also good for the consumer. It means their trade-in is going to be worth a bit more as well."

What's next:

So for now, the advice is the same for both car buyers and retailers: Buckle up. It’s going to be a bumpy ride.

"Car dealers are resilient," said Crane. "I think we’re going to find a way to make it through as we’ve always done with everything we’ve been hit with in the past."