Recent policy shifts around International Emergency Economic Powers Act tariffs could carry implications for dealers and the broader industry, though the full impact remains unclear, Frank McCleary, a partner at Arthur D. Little, told CDG News.
First things first: April 20 marked the first day businesses could file for refunds on tariffs invoked by President Donald Trump under IEEPA, following the Supreme Court’s ruling that the move was unconstitutional.
The refunds are expected to total $166 billion across more than 330,000 importers and over 53 million shipments.
U.S. Customs and Border Protection will distribute refunds through a new federal process, the Consolidated Administration and Processing of Entries (CAPE) program.
Why it matters: The tariff refunds could create opportunities for dealers, but they also add another layer of complexity to an already unsettled market as automakers, suppliers, and consumers try to make sense of it all.
Between the lines: Even as the refund process moves forward, it is important to keep it in perspective amid the many factors still in play, McCleary said, highlighting several considerations for dealers.
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Things to consider, according to McCleary:
The Supreme Court ruling and its fallout could prompt the Trump administration to pursue tariffs under different statutes, including further Section 232 investigations.
Price reductions are unlikely in the short term, given ongoing uncertainty and the “confusion it would create in the market,” though refunds could give OEMs room to push more incentive spending to support sales.
Dealers may see customers asking about refunds, making aligned communication between OEMs and franchise dealers important to avoid adding confusion.
Expect “pricing stickiness,” and potentially further price increases for OEMs that have not yet raised prices, while appreciable MSRP reductions appear unlikely.
“Transaction prices may come down a bit if OEMs use the tariff refund money to push sales and market share,” added McCleary. “More broadly, it will come down to how the additional 232 investigations play out... The other open point is the future of USMCA, which will have broader impact across [the] auto landscape.”
Bottom line: The tariff refund story may create upside, but it does not remove the broader uncertainty surrounding pricing and trade policy. For dealers, the near-term focus may be less about relief and more about staying prepared for how OEM pricing, incentives, and customer expectations evolve.
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