4/2/2025: It appears our beloved 25+ year imports are exempt from the duty increase. Business is back to normal! Continue reading if you want to know what could have happened, or what could still happen in the future. Always plan for the worst and be able to pivot accordingly. Don’t rely on one source of income, ever.
The 25% import tariff is set to go in effect on 4/2/2025. We have no idea if they will be changed, modified, limited, exempted, but we are positioned well to deal with the additional costs with little impact to you as the buyer. We also have no idea how the big auto manufacturers will try and back-door their way around this.
If you haven’t heard, you can read more: US auto tariffs shake global industry as higher prices, job losses loom
What is the tariff?
Until now JDM cars, or ANY car imported into the US from any country were “taxed” at 2.5% across the board, while trucks, or anything with a pickup bed was taxed at 25%.
So when importing a $10,000 car, you would pay an additional $250 to the government, which is very low. If you imported a $10,000 truck, minitruck, or anything with a bed then you were already paying the 25% rate of $2500. This tax was actually known as the, “chicken tax” and was started way back in 1964. Any guesses on why it was imposed? To grow and promote the US pickup truck industry and discourage Japanese and Asian pickup trucks from wiping out the F-150, Silverado, and Ram.
If you think about it, this 2.5% was far too low and should have been changed to 25% a long, long time ago. This low tariff incentivized car manufacturers to essentially outsource everything overseas and away from the US. The idea of increasing the tariff to 25% will theoretically ensure all the major car manufacturers build or expand plants in the US which in turn will create a large amount of jobs for the American people. What has this country lost the past 25 years? Jobs, manufacturing, technology, and the list goes on. Sure, we love buying cheap overseas products that have no warranty because our argument was it cost too much if it was made here.
As business owners there is nothing more we would love to do than hire more employees and create our own products and tooling in our USA facility, but the buyers wouldn’t support the price increase when they can just buy from overseas. The same is true for us as our suppliers are all overseas and can provide a, “good enough” quality product at prices that keep our business open.
How will the tariff affect JDM car pricing and our inventory?
Thankfully we don’t predict a large increase in pricing and we would not simply slap an extra 25% fee onto our retail pricing. It’s not a secret that vehicle importers can purchase vehicles for low pricing in auctions. That 25% tariff pricing applies to the “cost” of the vehicle we pay at the auction. Unfortunately we are already seeing other importers significantly increasing the prices of their inventory. This doesn’t make sense to us because our company mission statement is to bring great baseline cars to you at very reasonable pricing. We strive to offer the absolute lowest pricing JDM cars anywhere in the country. This 25% tariff move will simply increase the price gap between us and our competitors and bring us more business and customers.
Will the tariff increase auction prices?
This is a tricky question to answer. People from all over the world compete in Japanese auction bidding so pricing is very unpredictable and changes daily. It seems odd that people would be paying more for cars in auction now just as a response to ultimately, “get more money” in the end to cover the tariffs.
You would think auction pricing would decrease because demand is going to drastically decrease. No one really knows the answer and we won’t be able to see this for several weeks or months forward. What we do think is that it could decrease availability in the US which would then lead to an increase in demand once again. Weird how this all works, right?
Will people stop importing JDM cars from Japan?
It’s our opinion that hobbyist importers or non-business entities will be discouraged or slow down importing cars from Japan. People that were not making much importing cars might just give it up all together and go back to their normal 9-5 job. This is beneficial to the actual business owners who run dealerships and importing operations as those potential buyers might now be swayed to conduct business with an actual company instead of some guy or girl selling a JDM car on Facebook from their home. If there are fewer sources to buy JDM cars from that will centralize the inventory of the vehicles and stabilize the pricing of cars here. If there are less sellers then there’s less chances of undercutting everyone and selling cars with hidden issues or problems.
What are your thoughts on the matter? If someone wants to buy a JDM car they will still buy the car. JDM cars aren’t a necessity, they are considered a higher end hobby with a niche market. Hopefully other JDM dealers and importers will be a little less selfish with their profits and be able to bake the tariff into their margins so the buyers market can remain strong. That’s the bottom line.
