Providers and Administrators in blue logo
MenuMENU
SearchSEARCH

Tariff Impact Forecast

J.D. Power tries to foresee how duties will affect vehicle prices, sales.

by Hannah Mitchell
April 17, 2025
Tariff Impact Forecast

Automakers will need to absorb at least some of the tariff costs, including deciding whether to maintain lower-margin but highly tariffed models, J.D. Power predicts.

Credit:

Pexels/Adrian Gambet

2 min to read


With the obvious caveat that the U.S. economy is challenging to predict right now, a new forecast at least tries to pin down what the auto industry could expect as the rest of the year unfolds.

The J.D. Power look ahead, while acknowledging the undeniable impact of current and impending U.S. trade tariffs on automakers, expects that brands won’t pass on the full cost to consumers since doing so would cut sales.

Ad Loading...

“In order to maintain reasonable volumes, a large portion of tariffs must be absorbed,” said J.D. Power President of Data and Analytics and Chief Product Officer Thomas King in the forecast.

With those qualifications, it forecasts new-vehicle price increases starting in the late spring and settling at an average of about 5% by the fourth quarter in what J.D. Power calls a “new normal.” That would translate to an average of $2,300 per vehicle, despite current tariff exposure for U.S. retail auto sales equating to an average of $4,782 per vehicle.

The price increases would in turn result in reduced sales for an 8% drop in annualized retail deliveries, or 1.1 million units, J.D. Power expects. Depending on how tariff policy plays out, though, it said the decrease could be as low as 5% or as high as 12%, not taking any larger economic factors into account.

Tariff effects would also be spotty due to automakers’ varying degrees of exposure based on the volume of vehicles and/or auto parts they import, the data provider pointed out. The tariffs could thereby bring different effects even within an individual brand’s lineup.

Automakers will need to absorb at least some of the tariff costs, including deciding whether to maintain lower-margin but highly tariffed models. They could move supply to markets less exposed to tariffs and increase domestic production, along with retooling parts sourcing, J.D. Power said.

Originally posted on F&I and Showroom

More Industry

Line graphic showing week-over-week wholesale auto price changes
Industryby StaffApril 22, 2026

Black Book: Weekly Market Update

Wholesale auto conversion rates dropped slightly as auction buyers proved picky last week, analysts observed.

Read More →
pavement with car and charger wrapped around it painted on
Industryby Lauren LawrenceApril 16, 2026

EV Battery Cycle Life at Risk

Fast charging of electric vehicles provides a solution for range anxiety, but it also poses a risk to battery cycle life due to increased temperatures, according to an EV supply chain data provider.

Read More →
Photo of exterior facade of Beardmore Chevrolet store
Industryby Hannah MitchellApril 14, 2026

Founding Family Sells Nebraska Dealerships

Expanding Midwest automotive group picks up three stores as part of the robust transaction activity early this year.

Read More →
Ad Loading...
Up-close photo of car battery
Industryby Hannah MitchellApril 13, 2026

Automaker Increases Parts Recycling

Stellantis is adding a third end-of-life vehicle dismantling facility to feed its growing reuse business sparked in large part by autos’ growing lifespans.

Read More →
Photo of white 2026 Ford Bronco on a sandy beach
Industryby Hannah MitchellApril 10, 2026

March New-Vehicle Sales Don’t Reflect War

Cox Automotive data shows Americans doubled down on big-is-better despite price increases. Slightly higher incentives helped fuel the demand.

Read More →
Photo from the rear of the XC60 SUV
IndustryApril 8, 2026

Volvo to Shift Some EV Production to U.S.

The automaker says its movement of some electric-vehicle work to the S.C. factory is part of a more tailored product focus. It also plans to add a new hybrid model to the plant’s itinerary.

Read More →
Ad Loading...
Bar graphic depicting week-over-week change across the various vehicle segments
Industryby StaffApril 7, 2026

Black Book: Weekly Market Update

Last week's wholesale automotive auction activity continued in a healthy mode, though buyers practiced selectivity.

Read More →
red car at a gas station being filled with gas. Efficiency Drives Demand. Providers and Administrators logo
Industryby Lauren LawrenceApril 7, 2026

Gas Prices Driving Consumer Interest

CarGurus’ first quarterly review of 2026 shows that affordability concerns are continuing to drive consumer purchases with a shift to more fuel-efficient options.

Read More →
Blurred photo of red car moving down a road
Industryby Hannah MitchellMarch 31, 2026

Automakers Have More Tricks Up Their Sleeves

JD Power analysts see auto retail faring this year’s storms well through various means, though it acknowledges conditions are challenging to accurately predict.

Read More →
Ad Loading...
background view of Washington D.C. with the capitol building and cherry trees. Text says 'What's the Cost?' with two diverging arrows and the Providers and Administrator's logo
Industryby Lauren LawrenceMarch 31, 2026

Insurance Rates Continue to Fall

Car insurance premiums have continued to decline so far this year, the overall national average settling at $138 per month in March, according to Insurify data.

Read More →