Importers Still Don’t Know If Tariff Hike Will Apply to Used and Classic Cars

The United States’ tariffs that are widely expected to raise the price of many new foreign-built cars could impact used models as well. The companies who specialize in importing classic vehicles from abroad still don’t know how the 25% tariff scheduled to come into effect on April 3 will affect their business.

“I have Porsches, BMWs, and a Ferrari coming. Plus, more! Probably tag me for $200,000,” explained Gary Duncan, owner of Virginia-based Duncan Imports, to Automotive News. He brings in thousands of cars from Europe and Japan every year thanks in part to the 25-year rule, and he told the publication he’s not sure whether the 25% tariff announced by the White House will apply to these cars.

For context, the current tariff applied to most imported cars stands at 2.5% (trucks are an exception, due to the Chicken Tax). That adds up to $250 on a car worth $10,000. Taxing the same car at 25% would put the importer on the hook for a $2,500 bill. That’s high enough to deter some buyers, whether they’re importing a car for their personal collection or to flip it, but what happens to the cars that are already in transit? Shipping a car from overseas often takes a month. It sounds like many importers might have to pay an unexpectedly high bill. Some carmakers have said that they’re ready to absorb at least part of the tariffs to keep sales up, but importers have no one else to pin them on.

U.S. Customs and Border Protection told Automotive News that, as of April 1, it had no information about whether imported classic vehicles and restoration parts would be subject to the same tax as new cars. The agency will release a statement when it receives more details from the White House. That’s not stopping some dealers from sounding the alarm, though. California-based Toprank International Vehicle Importers, which specializes in Japanese Domestic Market cars, issued a warning to its customers about a “significant tariff increase on imported vehicles.”

What does Toprank know that the rest of the industry seemingly doesn’t? “I can tell you that, according to our customs broker, as of today, we are set to see a tariff of 27.5% on all cars and a 50% tariff on all trucks regardless of age,” a spokesperson for the dealer told Automotive News. However, several other companies who operate in the realm of imports told the publication that they’re still lingering in the dark.

Excluding used cars from the 25% tariff could send a ripple effect far beyond the collector-car market. Imagine you’re shopping for a new Mazda MX-5 Miata: the roadster is built in Japan, so Mazda will need to pay a 25% tariff on every example it imports starting on April 3. But, what’s stopping you from buying one new through an importer in, say, Vancouver, Canada, and immediately sending it over the border as a used car to skirt the tax? Could this create something like the gray market that was popular enough to warrant a ban in the late 1980s?

We’ve reached out to the U.S. Customs, and we’ll update this story if we learn more.

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