There are more cars than usual in Baltimore — and we don’t mean the traffic.
President Donald Trump implemented a 25% tariff on cars earlier this month. To avoid hefty levies, some manufacturers are opting not to process cars through customs at ports across the country, instead parking them in a sort of purgatory. They’re on American soil, but have not yet entered the American economy.
In Baltimore — one of the country’s top ports for autos — at least one manufacturer is indefinitely storing scores of its vehicles adjacent to the Patapsco River. Mitsubishi, the Japanese automobile company, has been holding cars at the Dundalk Marine Terminal since April 8, according to the Maryland Port Administration.
Foreign trade zones and bonded warehouses near ports of entry are legally outside of the territory that triggers duties and taxes. Some manufacturers are stationing inventory in those areas to avoid tariffs.
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But Mitsubishi’s vehicles aren’t in those zones in Baltimore, meaning the company is paying the Trump-imposed higher levy on its vehicles at the port. And it is paying fees to store them at the port indefinitely.
Why, exactly, Mitsubishi is stockpiling cars at the Port of Baltimore is unclear. The manufacturer has not responded to requests for comment.
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Volkswagen’s Audi is a tenant of the port’s Tradepoint Atlantic and imports cars using a privately operated terminal. The German car brand is reportedly holding cars at U.S. ports. It declined to comment on whether it is doing so in Baltimore.
Aerial photos this month appear to show the same Audis parked within the terminal for weeks.
“The changing landscape remains complex, and we continue to work to find the best path forward,” Michele Lucarelli, a spokesperson for Audi, said in an email. “We have no other information to share at this time.”
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With the exception of last year, when the Francis Scott Key Bridge collapse stalled shipping traffic, the Port of Baltimore has been America’s No. 1 car handler for over a decade. More inland than other East Coast ports, Baltimore is well-positioned to truck or train vehicles to dealerships near and far.
It’s not uncommon for Baltimore to bring in 2,000 cars a day. Huge ships capable of carrying several thousand vehicles at once often call at the port. Longshoremen then drive the cars off the vessels and park them before they clear customs.
“Then, it moves on its merry way,” said Jean-Paul Rodrigue, a professor of maritime business administration at the University of Texas A&M-Galveston.
That rhythm has slowed a bit, though.
Jaguar Land Rover and Mazda are also among the international manufacturers that have reportedly slowed shipments to the U.S. or held automobiles at port.
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The Port of Baltimore has 710 acres devoted to automobile shipments (nearly the size of New York City’s Central Park, a port document notes) and, given that space, holding cars at port has not yet created a backup.
“We’re not having any logistical issues right now,” port spokesperson Richard Scher said in an email. “If more auto manufacturers make the decision to hold their vehicles at ports, we might have to make adjustments to maintain efficiencies.”
For manufacturers holding cars at ports, something will have to give: Millions of dollars of goods are sitting and aging — in an industry that values the newest model — rather than on showroom floors and dealership lots.
“It’s a nightmare in terms of cash flow,” Rodrigue said.
More costs could be coming, too. The Trump administration has said it will impose substantial fees on Chinese-built ships later this year. The bulk of the world’s commercial ships were constructed in China.
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In Mitsubishi’s case, the reason it is paying the tariff, but still holding its cars at port, could be as simple as old-fashioned supply-and-demand.
Zach Shefska, the CEO of CarEdge, an online automobile marketplace, suggested that manufacturers are holding cars at port “intentionally to create scarcity to justify incoming price increases.”
He referenced the pandemic car shortage of 2021, when vehicle prices skyrocketed. If supply goes down, demand goes up.
“It’s pretty simple,” said Shefska, who grew up near Annapolis and now lives in Washington. “Less supply: bad for consumers. More supply: good for consumers.”
Mitsubishi is signaling that, with a lower inventory, it will be in a better economic position, said David Kass, a professor at the University of Maryland’s Robert H. Smith School of Business.
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“I think they’re betting that they can get a better price if they wait a month or two, that it would be more profitable,” he said.
That can be a gamble, though, especially with mixed messaging from the Trump administration. Economists have long warned against tariffs, but the president says they are necessary to boost American manufacturing.
Yet Trump’s levies have been turned on and off, and increased and decreased, repeatedly during his second term, roiling Wall Street and making it a difficult for businesses to plan.
Auto manufacturers holding inventory at ports to dodge the levies could look smart if the levies do decrease. Or, they could ultimately cough up the 25% tariff — or more, if Trump takes another swipe at foreign cars — after incurring months of storage fees at ports.
“I would not like to be in their shoes, that’s for sure,” Rodrigue said.
Banner photographer Jerry Jackson contributed to this article.
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