‘My car dealership can last just a few months after Trump’s tariffs come in’
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Trump has labelled today, 2 April 2025, ‘liberation day’ as he introduces his tariffs, which he believes will help the US economy recover. But for one Washington-based car dealer he believes the end may be near for his business.
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Read time: 4 mins
In brief
- David Horsford, who owns a car dealership in Washington DC, says he believes his business can survive just a few months after Trump’s tariffs are introduced.
- Horsford tells The News Agents he has no choice but to pass the 25% tariffs on all car imports onto customers, as margins are so small.
- He adds that his only hope is that Trump will see the damage done to the economy – if it happens – and reverse his plans.
What’s the story?
David Horsford’s car dealership in Washington DC can run, he estimates, for just a few months more after Trump’s tariffs come into force.
Having survived the Covid-19 pandemic and several financial crises, his business, which deals in Acura and Mazdas cars – both of which are Japanese, will be hit hard by the 25% import tax on all vehicle imports from 2 April 2025.
“I think for a couple months, as a car dealer we will be okay, but beyond that, absolutely not,” Horsford tells The News Agents.
“I think the impact probably won't be felt for a couple of months.”
The situation, he says, is "unfathomable".
“There are always those things that are going to knock you around, but this one is so artificially created, it's very difficult to know what'll happen,” he continues.
“We don't know if he is going to change his mind in two hours.”
Despite the introduction of Trump’s tariffs, on what the president has been selling as “liberation day”, Horsford says he still has no idea how they will work, and neither does anyone else in the industry.
“We still don't know details, how things will be enforced, what it looks like, even on a manufacturer level, I just get confusion,” he says – and this extends to the manufacturers he works with in Japan.
Trump's tariffs: 'We still know no details of how they will work'
Trump has imposed country-specific tariffs on Canada, China and Mexico, while the automobile and alcohol industry are subject to specific tariffs that apply to those products.
Horsford says, quite plainly, he has no idea what comes next.
“Nobody knows what to do. The only thing I can say is, I have to watch the inventory levels,” he says.
“Once the consumer sees the tariff situation, they might just walk away and say, ‘I'm not interested in getting a car’ - and it's very expensive for us to sit on cars that we can't sell.”
After a slow winter, he has seen a flurry activity in recent weeks as people try to get ahead of the tariffs.
“In the last week, people have started to panic and buy cars because they want to get under the wire,” he says.
“It's going to be a little strange for probably a month or two, until we're really selling these vehicles that are significantly higher priced.”
He adds that his margins are so low that absorbing the 25% import tariff on cars is simply not an option – as he makes on average just $1,500 (£1,158) on each $50,000 car he sells, on which he then needs to pay commission and interest on.
“We make money in the finance end of things. We have a parts and service part of the business that's substantial, but it all comes from that sale to start with,” he says.
“There's just no way that we could absorb even a piece of it, we're already selling as low as we can.”
He didn’t vote for Trump, but believes the president will step up if his tariffs plan backfires, although he thinks the US economy will need to take a major hit before he acts.
“I can't imagine him just looking at the economy going down the tubes and feeling comfortable with it,” he says.
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What’s The News Agents’ take?
Emily Maitlis says she still can’t fully comprehend the thinking behind Trump’s tariffs, which she describes as both “punitive” – but with no clear sense of who he hopes to punish – and “indiscriminate”.
“He's doing it to everyone, and so we're all stuck trying to work out why the world can't retaliate as one – which is still in the ether as a possible fight back,” she says.
“I think the mistake we make sometimes is thinking that Americans are all behind Trump's tariffs, and for the most part, they're not, because they fear what it's going to do to the economy.”
Jon Sopel says one key areas that helped Trump win the 2024 election was his promises on the economy and the cost of living for US people.
His tariffs will put that to the test.
Listen to the latest episode of The News Agents.
