New vehicle sales fall in May

The automotive sector — and consumers — will face higher costs, as this week, President Trump signed a proclamation calling for the Section 232 tariffs on steel and aluminum to be doubled to 50%.

Consumers had already hurried to buy ahead of the previous order, which imposed 25% tariffs on imported vehicles on April 3 and on car parts on May 3.

Reactions among automakers and suppliers had already been mixed before the most recent announcement. For instance, Volvo plans to lay off up to 800 workers in Pennsylvania, Virginia, and Maryland. Others say they will shift production to the US. Steelmaker Cleveland-Cliffs is idling its Dearborn Works in Michigan due to weak automotive demand.

In an April report, the Center for Automotive Research said that under the 25% tariffs, Detroit’s Big Three automakers faced an increased cost of $41.7 billion. For all US automakers, that rises to $107.7 billion.

Cox Automotive analysts had been forecasting a slowdown in May as inventory tightened and prices climbed.

“However, a new-vehicle market pace in May of 15.6 million is generally back in line with pre-March levels and is an indication the market is not collapsing quickly,” Cox Automotive said.