Used Car Costs on the Rise In Light of Recent “Trade War”
Once again I find myself writing another news article involving Trump. Now, it’s not to say that I am a fan of his (I highly disagree with many statements he has made), it’s just the things he’s been doing and saying have severely been impacting the automotive industry and here we are again. This time focusing on the impact that even used cars would have as a result of this never ending “trade war” Donald Trump has caused.
Thanks to the rising costs of nearly everything in our lives, I don’t disagree with you if the next car purchase you intend on making is a used vehicle – simply because they are supposed to be cheaper than the newer versions released on the market but that may not be the case for much longer.
In recent weeks the world has felt the impacts of the United States imposed tariffs – and no one was spared – every industry was affected and some are still suffering despite the tariffs being lifted on some of the products. Of all the industries, I have to say the automotive sector really felt the pain as even the raw materials (and tools in some cases) needed for the components of a car were being tariffed. It’s caused chaos at manufacturing plants, car dealerships, and even assembly plants and unfortunately it’s not getting better any time soon.

So Who is Impacted?
Well of course besides the consumers themselves, virtually everyone involved will feel the wrath, but let’s take a look at the car companies set to release new cars first. In a recent study done by the Anderson Economic Group, new car prices are expected to jump by $12,000 USD ($17,306.90 CDN) if the 25% tariffs were to be imposed on the Canadian, Mexican, and Chinese economies (with China seeing a 10% extra tariff). That’s even if car companies decide to release their newer models and not choose to halt or even cancel production because of this.
For used car consumers and companies, although it isn’t stated as of yet which specific cars will be affected, everyone is preparing for the worst. Essentially the gap between the pricing of new and used cars will widen drastically if the tariffs were to be imposed, which actually works as a double edged sword, so to speak, believe it or not.
On one hand, it might give the Canadian economy a slight advantage when it comes to buying cars at an auction. For American’s it will work out to be more expensive to buy a used car at a Canadian auction because of the tariffs they would be charged to bring the vehicle back over the border, which will put Canadian buyers at these auctions at the advantage, simply because they will have more variety to choose from. Not to mention the exchange rate might be another factor that Americans are considering because although the price tag may look cheap in Canadian dollars, it would work out to be equivalent or even more than the selling price in the United States.

But on the other hand, the cars that are available might become more expensive. In a Black Book Analysis a couple different outcomes were looked at. One outcome had Canadians reacting to higher new-vehicle prices by migrating in large numbers to the pre-owned markets which shows that demand is higher than supply. In another, where the tariffs don’t apply to used cars, American bidders continued to attend Canadian auctions and scooped up many of the choices at favourable exchange rates driving up the cost at the auctions.
Does Work Need to be Chaotic Too?
And let’s not even talk about the chaos happening at dealerships currently (okay, that was sarcasm and I actually do want to talk about a few points here). The tariffs aren’t even in effect yet, and dealerships are planning ahead to try to deal with the predicted outcomes of this tariff war. For instance, fraud will be one thing they will have to plan ahead to deal with. A United Kingdom based insurance company that has branches in Canada, called Aviva, predicts a tighter American-Canadian border to increase the likelihood of Canadians accidentally buying stolen vehicles due to the fact that thieves will manipulate and flip them domestically rather than facing the risk of trying to get the cars in the United States.
Another unpredictable? Interest rates. Not to mention other aspects as well, like the cost to repair foreign parts (tariffed parts), and the economic fluctuation tariffs may cause in local markets – all things noted by lead economist at the Canadian Automobile Dealers Association, Charles Bernard.

Impacts on the United States Market
Although it is nearly impossible to close up shop internationally and open car manufacturing plants overnight in the United States, it isn’t stopping Trump from thinking this can actually happen. He seems to have closed off his mind to the actual impacts his decisions will have not only on foreign economies but in the United States as well. I guess the saying about “those you don’t listen, have to feel” really stands true here.
There are all kinds of indicators that this decision is wrong – on so many levels – but with the rose colored glasses on I guess it’s not that bad to Trump. The markets are dropping rapidly, just take a look at the impacts on the stock market within the past couple of weeks, it’s the worst it’s been! Investors are losing faith and there are looming talks about a recession not that far off. Trump’s plan to “Make America Great Again” seems to be failing and rapidly at that.
And as if some kind of joke or mockery after all of his pre-election comments, Trump went and actually bought a new car – a Tesla of all cars – amidst the chaos happening currently in the United States. It must be great to be the President of the country and be making all this money while your people are the ones suffering.

When asked about this recent purchase [“What is your message, President Trump? You’re buying a new car while there are some folks who will see this clip at home and they are struggling with their retirement accounts [and] uncertainty about work ahead.”, Fox News’ Peter Doocy asked Trump at a White House lawn event on March 11, 2025]. Trump simply responded, “Well, I think they’re going to do great…our country had to do this. We had to go and do this.” (Hayes , C. (2025, March 12). Trump’s threat to the U.S. economy could be worse than we imagined. MSNBC. https://www.msnbc.com/top-stories/latest/trump-canada-tariffs-tank-economy-rcna196060)
I’m sorry, what? I can’t be the only one that thinks not only his comments but the whole situation is absolutely ridiculous. Anyways, not here for this so let’s get back on track. At the same event, when Trump was asked about his thoughts on the recession by Fox News’ Maria Bartiromo, he said, “I hate to predict things like that. There is a period of transition because what we’re doing is very big. We’re bringing wealth back to America, that’s a big thing. There are always periods of — it takes a little time.” (Penley, T. (2025, March 10). Trump says us will experience “period of transition” when asked if economy could see a recession this year. Fox Business. https://www.foxbusiness.com/media/trump-us-experience-period-transition-economy-see-recession-year)
Clearly there is a problem here people!

But there’s an unspoken truth about politics that many people don’t know – presidents don’t have a ton of power over the macro economy, they just fall into situations largely out of their control – they take the good with the bad when it comes to the standings of the economy as a whole.
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I mean, we have seen some examples within the past 3 weeks or so as mentioned in this article, but I feel there is more to come. Let’s be honest, clearly the tariffs are not going anywhere, that is unless Canada accepts Trump’s “offer” to become the 51st state (which will never happen) but just look at how many times they have been delayed already. Trump is going to treat this situation with the same outlook that he views Ukraine, Greenland, and Canada with – “It’s ours and we are going to take it.” Whether this refers to the money he feels the world owes the United States or just the opportunity only he sees to expand the United States and create the “one world country”.
Hopefully something changes within the next few days before the long awaited tariffs hit or maybe it will be these tariffs hitting that will make Donald Trump realize he can’t function solely through having everything done in his own country. Either way, I hope for the sake of the world Trump goes back on his world altogether and reveals this was just a sick joke. Cause that’s what politics feels like sometimes, a sick joke that affects a whole nation of people.
Final Thoughts
If you still find yourself in a situation where you need or are forced to buy a used car in these times, check out our article published 3 years ago (a major throwback!) linked here on how to make the most of the test drive.
