Five Ways Trump Administration Policies Are Upending the Commercial Vehicle Market

Tariffs are back—and they’re impacting the commercial vehicle industry in ways manufacturers might not have considered. The Trump administration has reintroduced trade policies that increase prices for imported steel, aluminum and vehicle parts. At the same time, it’s rolling back support for electric vehicles (EVs) and relaxing emissions rules.

For original equipment manufacturers (OEMs), upfitters and suppliers, these changes are driving up costs and complicating operations. Material and component prices are rising, global supply chains are under pressure and EV adoption is slowing. Companies are having to make tough decisions about where to build, how to source and what to expect next.

In this miniblog series, we’ll take a closer look at how today’s federal policies are shaping the commercial vehicle market. In part 1, we’ll explore five key takeaways for the commercial vehicle market from the Trump administration’s tariffs and policies. In part 2, we’ll look at how companies are responding and share strategies to help mitigate risk and stay ready for what’s ahead.

Five Trump Administration Takeaways for the Commercial Vehicle Market

One: Import Duties on Raw Materials Are Increasing Manufacturing Costs

Steel and aluminum tariffs continue to affect commercial vehicle production, particularly for heavy-duty vehicles and upfits. A 25% tariff—now increased to 50%—on steel and aluminum imports, including from Canada, is contributing to cost increases for OEMs and upfitters alike.

According to 2024 data, 47% of the aluminum and 13% of the steel used in the US were imported. Canada supplied 58% of imported aluminum and 23% of imported steel. These materials are used extensively in commercial vehicles—from vans, pickups, chassis cabs, powertrains and other components to custom-built bodies and equipment installed by upfitters. As a result, vehicle production and upfitting are becoming more expensive, with costs likely passed on to buyers.

Two: Tariffs on Auto Components Are Impacting Manufacturing and Repair

In addition to raw materials, many essential components—such as transmissions, engines and electronics—are sourced from international suppliers. Global supply chains often rely on cross-border movement of parts before final assembly. For example, some class 8 trucks use powertrains developed in the EU and assembled in North America.

Tariffs on these components are increasing unit costs for OEMs and may affect service and maintenance costs over time. According to CNN, increased costs could climb as high as $4,000 per vehicle on average.

Imported aftermarket parts are also affected. The increase in costs could push up the price of insurance and service as well as impact parts availability, especially for older vehicles.

Three: New Policies Are Slowing EV Adoption Even More

EV adoption in the commercial vehicles market has already been hindered by cost, range constraints and limited charging infrastructure. Further hampering adoption, the Trump administration has rolled back several clean energy policies, including:

• Suspending the $5 billion National Electric Vehicle Infrastructure (NEVI) charging program
• Replacing government EVs with gasoline-powered fleets
• Announcing more lenient emission standards
• Proposed elimination of the $7,500 EV tax credit
• Phasing out California’s EV mandates and potentially preventing the California Air Resources Board (CARB) from setting its own emission standards

While some large fleets, such as those operated by logistics providers, have adopted EVs for short-haul urban routes, independent contractors and smaller businesses may be less likely to invest in EVs without policy incentives. Heavier vehicle weight and longer charging times remain key limitations.

Four: Reshoring May Require New Space and Extra Funding

Some OEMs are expanding production in the US to reduce their exposure to tariffs. For example, General Motors has increased capacity at its Fort Wayne, Indiana, plant while scaling down production in Canada and Mexico.

These changes may require new hiring, retraining or investment in equipment and tooling. However, reshoring doesn’t necessarily increase total production volume—capacity may simply shift from one region to another. Some suppliers could find it difficult to fund new operations or adapt sourcing strategies quickly, as it often takes months or years of detailed planning to build or change a factory.

Five: Sourcing Shifts and Pricing Could Influence Buyer Preferences

While price remains the primary driver in commercial vehicle purchasing decisions, the increased cost of foreign-sourced vehicles and parts could influence sourcing strategies and buyer preferences. Some vehicles—such as Ford’s Transit vans—are assembled in the US, while others—such as the Ram ProMaster—are built in Mexico and may now face higher cross-border costs.

Several manufacturers have taken steps to increase their North American presence to reduce the impact of tariffs on their business. Isuzu, for example, has committed to assembling its vehicles in its new facility in South Carolina. These steps may lower costs, reduce lead times and help meet domestic sourcing requirements.

Coming Up: How the Commercial Vehicle Industry Can Handle Shifting Policies

The Trump administration’s trade and emissions policy changes are affecting raw material pricing, global supply chains and alternative fuel strategies. Manufacturers and suppliers in the commercial vehicle space are responding by revisiting sourcing models, pricing strategies and regional production plans. In part 2 of this series, we’ll explore strategic actions OEMs, body builders and upfitters can take to reduce risk and keep production and delivery on track.

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