NEW YORK – U.S. Sen. Bernie Moreno maintains that the disruption from the Trump Admin.’s tariffs will be short-lived and entirely positive in the long run, ushering in a “golden age” for the U.S. economy and its auto industry.
“We won’t even be talking about this next year at the auto show,” says Moreno (R-Ohio), a former franchised new-car dealer and first-term member of Congress, as he flatly contradicts a lineup of economists and other experts at the Auto Forum New York.
“We’ll be looking back at a fantastic year.”
Moreno jokes from the stage that experts who disagree with him should maybe be forgiven, since recreational cannabis is “legal in New York.”
He also calls the state of New York “probably Ground Zero for lunacy,” in terms of trying to incentivize battery-electric vehicles with high tax breaks, far ahead of consumer demand.
“What’s worse? Tariffs, or that? That’s much worse,” the senator says. The Trump Admin. aims to kill the $7,500 tax break for BEVs and revoke California’s permission to create emissions rules that are stricter than federal rules.
“I’m not anti-electric car, I’m pro-choice,” Moreno says.
Moreno’s comments came during the last session of this week’s Auto Forum, in a fireside chat. Most speakers preceding him on the program predict the tariffs will lead to higher industry costs, boosts in consumer prices, lower new-car margins for automakers and dealers, reductions in new-car production, and slower auto sales in 2025 – and, some say, potentially a recession in the U.S.
Flip Side
“I think there’s a lot of risk out there. People are afraid to make an investment, because the environment could flip on its head tomorrow,” says Patrick Manzi, NADA chief economist, in an earlier session at the forum.
Manzi says that in January, he pegged the likelihood of a U.S. recession at 20%. Today? “Probably 60%,” Manzi says. “Consumers are very concerned about the economic environment.”
The forum is sponsored by the National Automobile Dealers Assn., J.D. Power, and the Greater New York Automobile Dealers Assn. in conjunction with the New York International Auto Show.
Not All Bad – For Some
Most of the experts at the forum agree that, on average, tariffs would have a very significant, negative effect on the U.S. auto industry. But multiple speakers at the forum also point out that the impact wouldn’t be as bad for specific brands. That difference may be a significant competitive advantage under the new tariff regime.
J.D. Power’s Thomas King says the estimated net effect of tariffs on a brand varies widely, depending on a brand’s share of U.S. production and U.S.-made parts, and the brand’s ability to shift production around, among global markets. The average per-vehicle effect on consumer prices would be an estimated $4,782, or 10.6% of average transaction price, says King, president, Data & Analytics Division and chief product officer at J.D. Power.
However, there’s a wide range, from an estimated effect as low as single-digit percentages of average transaction price, which he says would probably be tolerable, or at least survivable, to as much as 25% of average transaction price. An increase that big could make some lower-volume, import-heavy brands unprofitable in the United States, King says. Not only that, there’s substantial variation among models from the same brand, he says.
Up or Down, It’s Still a Competition
“If you are gifted with a significant advantage … it would be prudent and reasonable to take advantage,” King says.
Before tariffs, King says the estimate for U.S. retail new-car sales was 13.4 million units, up from 13.1 million in 2024, not counting fleet sales. With tariffs, the new estimate for 2025 is about 13 million. The estimate is lower if there’s a recession, but King doesn’t specify a number. The latest retail sales-only estimate from Cox Automotive is similar, down from an earlier, pre-tariff estimate of 13.3 million.
Separately, Moreno – who sold his dealerships well before running for the U.S. Senate –suggests Ford, which has a high level of domestic content, may have an advantage. “If I were a Ford dealer, it’s an incredible opportunity,” Moreno says, referring to Ford’s recent move to offer employee pricing for everyone.
“The good news is, we’re going to get past all this,” Moreno says. He predicts the seasonally adjusted annual rate of sales to hit 16 million this year, including fleet sales, heading up to 20 million in the next few years.
“I think we get this all resolved in 60, 90, 120 days,” Moreno says.
