Proposed tariffs on imported automobiles and parts could have long-reaching effects on the North American collector car market, with many fearing it could effectively kill the industry.
The Department of Commerce has not specifically stated an amount, but reports indicate that tariffs could climb as high as 25 percent on imported vehicles and parts, a ten-fold increase over current rates.
This new tax would apply to all vehicles and parts, regardless of age. Vehicles that originated in the U.S. are currently exempt, but it’s unclear whether that exception will remain.
Industry experts say that tariffs of less than five percent on vintage vehicles could likely be passed along to consumers, but fear that an increase to 25 percent would end imports. If retaliatory tariffs were enacted, American exports would 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.”
Auction houses currently offering cars from overseas under Temporary Importation Bonds pay double the amount of duties 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 Department of Commerce is currently seeking comments on the tariff increase. But be quick! The comment period ends Friday, June 22.
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