Since last week, tariffs have wreaked havoc on the U.S. economy and beyond, prompting recession fears as many prominent stocks fall.
President Donald Trump has presented these tariffs as a means of supporting American industry and compelling companies to set up more facilities in the U.S. But so far, his tariffs have mostly created financial mayhem as consumers panic over the risk of rising prices.
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These tariffs have impacted almost every industry, including auto manufacturing. Even companies such as Tesla, whose exposure is limited, are struggling as economic uncertainty casts dark shadows over financial markets. This is a worrisome sign since it builds cars in the United States. However, one market could receive an unexpected benefit from the tariff headwind.
The market for classic cars may be about to see an unexpected surge as a result of the recent auto tariffs.
Tariffs are crushing most industries but there may be an unusual winner
Anyone who has studied financial markets knows that they tend to be zero-sum in nature. When someone starts to benefit, someone else is inevitably losing.
In the case of current tariffs, it’s easy to assume that no one will win, as analysts such as Daniel Ives of Wedbush Securities have predicted. However, one type of car is exempt from the tariffs, and that group is poised to benefit significantly.
Related: Major U.S. automaker makes harsh decision in wake of tariff tussle
The recent 25% tariff on all imported automobiles and certain parts does not apply to classic cars, specifically those over 25 years old.Â
While the White House’s initial announcement sparked some confusion, it has since been made clear that older vehicle imports are exempt from the tariffs.
A section of the U.S. Customs and Border Protection’s webpage states that used cars are indeed subject to the tariffs “except those manufactured in a year at least 25 years prior to the year of the date of entry.”
Meanwhile, the tariffs are likely to increase the prices of new cars made in the U.S. significantly. That could easily be a blow to U.S. automakers, as consumers tend to shy away from large-scale purchases in lean economic times.
But for those in the classic car market, these tariffs could be an extremely positive catalyst, as more buyers may take the opportunity to import the older vehicle they’ve always wanted. Per the Robb Report:
“This year’s two most expensive auction cars, the 1954 Mercedes-Benz W 196 R Stromlinienwagen and the 1964 Ferrari 250 LM by Scaglietti, were sold in Stuttgart, Germany, and Paris, Francis, respectively. The former car went for $53 million and the latter for $36.3 million, so a 25-percent tariff would have tacked a substantial sum to the price of each car were they then imported to the U.S.”
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The outlet also adds that many of the market’s most desirable classic cars are sold outside the U.S., primarily in Europe. Given the many buyers in the U.S., the market could have been severely compromised if tariffs were applied to classic cars.
Is the U.S. economy headed for a classic car boom?
This exemption from the auto tariffs means that the incentive to buy a classic car and import it to the U.S. will be high in the near future, as importing all other vehicles will be much more expensive. If enough buyers seize the opportunity, it could lead to a boom in the classic car market.
That said, with the stock market in freefall as a result of the tariff turmoil, some have raised the question of whether or not buyers will want to purchase a classic car right now. The U.S. economy is in a precarious position, and unless Trump eases the tariffs, things could easily get worse.
Related: Former big tech CEO issues grave warning on the impact of tariffs
Even so, classic car buying isn’t likely to suffer too much during a steep economic decline, as the market typically consists of extremely high net-worth individuals.
However, these buyers may be impacted in other ways as well.
“The new tariffs may even affect what are typically thought of as all-American vehicles,” reports Hemmings Motor News. “Many collector car owners also own a light-duty truck. Ford makes some of its engines for its F-Series trucks in Canada while most Ram engines are made in Mexico. Tariffs are scheduled to be applied to the percentage of a vehicle that comes from outside the U.S.”
Overall, while many are worrying over tariffs, this development is clearly a rare positive catalyst for classic car collectors in the U.S.Â
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