US vehicle sales saw a sharp decline in May as the effects of new import tariffs weighed on the automotive industry. Light vehicle sales, including trucks and cars, dropped to a seasonally adjusted annual rate of 15.6 million units, down from 17.3 million in April. This marks the lowest monthly sales level since January, according to the Bureau of Economic Analysis.
The decline follows a surge in purchases ahead of President Donald Trump’s implementation of 25% tariffs on imported vehicles in April and auto parts in May. The additional costs are expected to raise production expenses for domestic automakers, impacting pricing for consumers. On Tuesday, Trump doubled Section 232 tariffs on steel and aluminum imports to 50%, further increasing cost pressures.
Higher borrowing costs also discouraged buyers, as the Federal Reserve maintained interest rates at 4.25–4.5% amid concerns that tariff-related uncertainty could fuel inflation and slow economic growth. In May, truck sales fell by 9.1% to an annualized rate of 13 million units, while car sales dropped 10% to 2.6 million. Domestic vehicle production also declined, with April’s annualized rate falling to 10.16 million from 10.21 million in March, reflecting ongoing industry challenges.
