Though President Donald Trump paused reciprocal trade tariffs for 90 days against trading partners across the world, the 25% duties he imposed on vehicle imports were still in effect, to be followed by a matching tariff on some auto parts scheduled for enactment on May 3.

The suspension of the reciprocal tariffs that had just taken effect caused widespread relief, and automaker stocks revived after falling when the tariffs were announced. 

But the roller coaster trade policy, which included an escalation of tit-for-tat tariffs between the U.S. and China, jarred the business world and left the auto industry wondering how it will fare in both the short- and the long run.

Canada has responded to the U.S. auto tariffs by imposing its own 25% tariff on imports of U.S. vehicles and vehicle parts that don’t comply with the North America trade agreement.

Due to the trade war, industry analysts have predicted 10% to 15% new- and used-vehicle price increases as automakers pass along tariff costs to customers. Meanwhile, some automakers, including Ford and Stellantis, have extended employee vehicle purchase discounts to consumers.

Market watchers expect continued healthy sales in the short term as dealers sell existing stock and consumers buy before the tariff effect takes hold, but they foresee the duties cutting demand as prices exceed already inflated levels.