Texas car dealer reacts to new auto tariffs from Trump administration

In 2018, President Trump announced a series of tariffs on imported vehicles, including a 25 percent tariff on foreign-made cars and trucks, which greatly affected car dealerships across the United States. Don Herring, the owner of Don Herring Mitsubishi dealerships located in Plano and Irving, Texas, expressed his disappointment with the announcement. He noted that Mitsubishi, the manufacturer he partners with, had previously indicated they could not absorb such large tariffs, which could result in increased prices for consumers. Herring highlighted that Mitsubishi had already sent out communications regarding the potential impact of tariffs on the manufacturer’s suggested retail price (MSRP) of their vehicles. At the time of the announcement, Don Herring employed around 80 people across his two dealerships, indicating a significant stake in the automotive industry despite potential economic shifts. Herring shared that Mitsubishi had a 100-day supply of vehicles imported to the United States before the tariffs took effect, meaning that those vehicles would not be subjected to the new tariffs. Most of Mitsubishi's vehicles available in the U.S. market are produced overseas, primarily manufactured in Japan. Herring anticipated that if the tariffs were enacted, consumers would likely gravitate toward the used car market as new vehicle prices increased. He mentioned his dealerships had already been expanding their used car operations, suggesting a strategic pivot in response to the impending tariff effect. In the weeks leading up to the tariffs being applied, his dealerships began efforts to optimize used car pricing so that new cars would be perceived as a valuable addition rather than a necessity. Overall, as a chairman of the North Texas Automobile Dealers Association, Herring not only considered the economic implications for his own businesses but also the broader impacts on the automotive market in Texas and nationwide. By focusing on enhancing the appeal and supply of used cars, Herring aimed to mitigate potential losses from the new tariff policies while preparing for shifts in consumer behavior following significant changes in pricing for new imported vehicles.