How the Trump Tariffs Will Affect Fleets
Photo of Donald Trump via Gage Skidmore/Wikimedia.
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President Donald Trump’s executive order imposing tariffs on foreign steel and aluminum may translate to higher prices to commercial fleets for vehicles and truck or van equipment, fleet management company experts said.
Following Trump’s March 8 executive order, tariffs of 25% on steel and 10% on aluminum imported into the U.S. go into effect 15 days later. Canada and Mexico will initially be exempted from the tariff, and other countries could be added later, according to reports.
Wall Street and automotive analysts have said the tariffs are likely to increase vehicle prices because manufacturers would pass along higher costs to customers.
“A likely result from these new steel and aluminum tariffs is that costs will increase throughout the supply chain, driven by higher raw material prices,” said Charlie Chesbrough, senior economist for Cox Automotive. “With demand at high levels already, it’s likely suppliers will pass their higher costs up the chain, and eventually to car buyers. Alternatively, suppliers may have to absorb the higher input prices by cutting their own costs — generally, neither outcome is good for the industry.”
JPMorgan analyst Ryan Brinkman released a report saying the tariff would likely impact the earnings of Ford and General Motors, but he added that any rise in the prices of these materials would likely be absorbed by the manufacturers, reports CNN Money.
Equipment manufacturers such as Adrian Steel, Knapheide, Ranger Design, and others have begun using lighter-weight materials but still primarily offer steel-based shelving, ladder racks, and other equipment.
Whether fleets will pay more for their vehicles and auxiliary equipment remains to be seen, said Partha Ghosh, ARI’s director of vehicle supply chain and remarketing.
“Depending on where OEMs and upfit vendors source their steel and aluminum, and how much of these materials they source from foreign producers, they …Read the rest of this story
