Tariffs Imposed by Trump Lead to Sharp Decline in U.S. Auto Sales Last Month

About 1.6 Million Units Down from Previous Month
Largest Drop Since Early COVID-19 Pandemic

As the administration of President Donald Trump has imposed a 25% tariff on imported automobiles since April 3, sales of compact vehicles in the United States saw a sharp decline last month.

On the 3rd (local time), Reuters, citing data from research firm Wards Intelligence, reported that the seasonally adjusted annualized rate (SAAR) of compact vehicle sales last month was 15.65 million units, a decrease of about 1.6 million units compared to April’s 17.25 million units.

Volkswagen Group vehicles at the Port of Emden in Emden, Georgia. Photo by Reuters Yonhap News.

According to the report, this is the largest drop since April 2020, during the early stages of the COVID-19 pandemic. In March, sales reached 17.83 million units.

The sharp decline in vehicle sales in May is also attributed to consumers rushing to purchase vehicles in anticipation of price increases caused by the Trump administration’s tariffs on automobiles.

Automakers have managed so far by relying on their stock of 'non-tariffed' inventory vehicles, but there are predictions that price increases will become inevitable once these stocks are depleted.

Ford, an American automaker, has already raised prices for three models produced in Mexico. Japanese automaker Subaru has also announced price increases for some new models.