As news about auto tariffs, specifically in regard to Canada, continues to make headlines, dealers’ concerns about the impact of the duties are waning.
An August poll by Cox Automotive shows a double-digit drop in the percentage of dealers concerned about tariffs since March 2025.
Driving the news: In early 2025, concern about tariffs on vehicles, aluminum and steel ahead of the “April 2 Liberation Day” fueled new vehicle sales.
First-half sales in 2025 were up 4% year-over-year, according to Cox Automotive.
After falling off at the start of the year, sales have rebounded through August on a 16.1 million pace.
Little impact: Since the early announcement about tariffs, many have been reduced by 15% for most imported vehicles.
With an ongoing trade war with Canada, the Trump Administration has threatened a 50% duty in 2027.
Vehicle prices have increased only slightly from 2025, with the average new vehicle listing price at $49,486, up 1.9% from August 2025, according to Kelley Blue Book.
What dealers think: From last spring, franchise dealers concerned about new tariffs have dropped from 39% to 26%.
Fewer of their independent counterparts also expressed concern about new tariffs, decreasing from 31% to 21%.
The number of franchise dealers with little or no concern about tariffs increased by 19% and for independents by 9%.
Cox Automotive Executive Analyst Senior Director, Economic and Industry Insights, Erin Keating, told CDG News that the dealers’ views reflect how many of the worst fears about tariffs were unrealized.
“Vehicle sales have actually remained relatively resilient,” Keating said. “Inventory has improved. Most manufacturers actually absorbed the cost, so the tariff burden wasn't passed on to the consumer the way people feared. Therefore, the dealers didn't experience this big fracture in their sales pace, and in their volume of sales.”
Part of negotiations: In the poll, an increasing number of dealers saw the tariff proposal as a negotiation tactic.
Among franchise dealers, 18%, up from 6% last year, expected a deal to be reached before implementation.
With independent dealers, 12% thought a deal was expected, double the amount from the year before.
“It's becoming a little bit of static, a little bit of noise in the background, and being seen more and more as if any announcement that comes from the administration around tariffs, especially as it relates to Canada and Mexico, since that hasn't been resolved, that those are, in fact, a negotiation tactic on behalf of the administration to get those negotiations moving,” Keating said.
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Concerns around parts: The one area that dealers did show increased anxiety about surrounding tariffs was the impact on parts and service.
Independent dealers saw a 3% increase, with 14% expressing concern, while franchise dealers’ concerns spiked from 7% to 11%.
Keating noted that independent dealers are more sensitive to price increases on aftermarket parts for reconditioning, impacting their operations.
Bottom line: Tariff concerns may be waning among dealers as sales have stayed strong, but several other headwinds continue to face the industry.
“If you think about everything that the dealers have dealt with over the last five, six years, significant supply chain challenges, inflation, which has been going through the roof, and interest rate volatility,” Keating said. “Compared with all of those, the tariffs really haven't been felt at the dealer level and haven't been felt across vehicle sales.”
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