Car sales plummet following pre-tariffs panic buying: The party is over

The US auto market is showing signs of significant strain as carmakers, dealers and consumers face the combined pressures of rising tariffs, soaring prices and deepening economic uncertainty.After a brief surge in spring sales, the market stalled in June as consumers pulled back on big-ticket purchases, according to the latest figures.The slowdown follows President Donald Trump’s tariffs on auto imports, which have forced automakers to rethink pricing strategies and brace for further disruptions in the months ahead.The annualized automotive selling rate likely dropped to 15 million in June — down sharply from 17.6 million in April — marking the slowest pace in the past 12 months.According to industry researcher JD Power, the second-quarter sales figure still managed a modest 2.5% increase from the prior year, as shoppers “rushed to showrooms” to beat anticipated price hikes.But that momentum has now “subsided,” and analysts warn that the worst may be yet to come.“The party is over,” Jonathan Smoke, chief economist at Cox Automotive Inc., told Bloomberg News.“It’s clearly slowing.

It’s because of affordability getting worse and forcing what we think will be production declines to keep supply in balance.”Certainly.Here’s a concise three-sentence summary of the data:US auto sales saw a sharp spike in early 2025 as consumers rushed to purchase vehicles ahead of Trump’s new tariffs, frontloading demand and contributing to a subsequent slowdown.

Despite fears of soaring prices, the average new car cost in June 2025 was up just 1% from a year earlier.Analysts note that the broader rise in auto prices — up 28% since 2019 — has been driven largely by pandemic-related supply chain issues and inflation, which soared during the Biden administration, and not solely the recent tariffs.Smoke predicts that the annualized monthly rate of US auto sales will remain around 15 million for the second half of the year, down from 16.3 million in the fir...