P&A Providers & Administrators
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

Subwoofer in trunk of car.
Industryby Lauren LawrenceMay 26, 2026

Ownership Priorities are Shifting

A new survey shows that in the U.S. vehicle quality for generation Z is largely defined by advanced safety features, intuitive technology and premium sound systems.

Read More →
Man's hand holding gas pump in fuel tank of white car
Industryby Hannah MitchellMay 26, 2026

Pump Price Jump Calculated

ISeeCars.com examined fuel costs for different power trains, finding which ones have experienced the biggest hits since the war in Iran commenced.

Read More →
Graphic showing previous week's truck and SUV segment prices
Industryby StaffMay 20, 2026

Black Book: Weekly Market Update

Wholesale values fell last week despite the spring season still being in the traditional full-gear mode, analysts said.

Read More →
Ad Loading...
Photo of dealership sign with Toyota logo
Industryby Lauren LawrenceMay 19, 2026

Arkansas Auto Group Acquires First Indiana Rooftop

Performance Brokerage Services represented both the buyer and seller in the sale of Carver Toyota of Columbus by Carlock Automotive Group.

Read More →
Headshot photo of Antonio Filosa, Stellantis CEO
Industryby Hannah MitchellMay 19, 2026

Stellantis to Dive Into U.S. Lending

The multinational maker of Chrysler, Dodge, Jeep, Ram and multiple other brands received conditional approvals for a Utah-based industrial bank.

Read More →
Photo of the rear of a new BMW iX SUV
Industryby Hannah MitchellMay 12, 2026

New-Vehicle Prices Rise

With April sales down, higher prices on in-demand large vehicles helped inflate the overall ATP, though increases were under long-term averages, Cox Automotive reported.

Read More →
Ad Loading...
Graphic of car segments' results the previous week
Industryby StaffMay 12, 2026

Black Book: Weekly Market Update

Last week in the wholesale automotive market proved to be a mixed bag, analysts reported.

Read More →
Graphic of last week's estimated used retail days to turn
Industryby StaffMay 6, 2026

Black Book: Weekly Market Update

Conversion rates were flat last week at 63%, Black Book analysts calculated, as low-mileage and almost-near units outpaced the overall market.

Read More →
cargo ship with vehicles, at dock
Industryby Lauren LawrenceMay 5, 2026

EU Auto Association Urges Action

Trade relations between the European Union and the U.S. are at risk, causing the European Automobile Manufacturers Association to push lawmakers to make a decision.

Read More →
Ad Loading...
two people working on a paper contract together
IndustryMay 1, 2026

Driving into the Super CFC Era

Understanding the risks and benefits of retail accounting and Super CFCs can help you better present options to your dealer partners.

Read More →