President Trump’s proposed import tariffs could have seismic effects on the worldwide market for classic cars, potentially leading to a huge drop in values.
The charges would affect all cars and parts brought into North America, regardless of age. The US Department of Commerce has not specifically stated an amount, but reports indicate that tariffs could climb as high as 25 percent, a ten-fold increase over current rates.
Vehicles that originated in the US are currently exempt, but it’s unclear whether that exception will remain.
Industry experts say that tariffs of less than five percent could likely be passed along to buyers, but fear that an increase to 25 percent would end imports altogether – isolating one of the world’s largest markets for classic cars and destabilising prices.
Worse still, if retaliatory tariffs were enacted by other countries, American exports could cease, effectively killing the trade altogether.
The restoration business would suffer from the proposed tax increases, too. Even for American vehicles, many parts are made overseas. Sandra Button, chair of the (usually apolitical) Pebble Beach Concours d’Elegance, released a statement on Friday saying, “I cannot imagine how we will be able to maintain and share even the collector cars we already have in the United States—whether first made here or abroad.”
American auction houses selling cars from overseas under Temporary Importation Bonds currently pay twice the amount of duty if the vehicle sells, or send it back if it doesn’t. If the new tariffs are enacted, that bond would increase from five to 50 percent.
The US Department of Commerce is currently seeking comments on the tariff increase. Rest assured, we’ll be watching this one closely…
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