Important Update: Tariffs Affecting Vehicle Supply | Southgate Lease Services

Important Update: Tariffs Affecting Vehicle Supply

As global trade conditions continue to shift, we want to keep you informed of new developments that are impacting our industry. Recently imposed tariffs on foreign-made and foreign-assembled vehicles have created an immediate ripple effect on the highly complex global automotive supply chain.

Here is what we know so far:

  • As of April 3rd, a 25% tariff now applies to vehicles imported to the U.S., with the exception of vehicles from Mexico and Canada, which are in compliance with the United States-Mexico-Canada free trade rules (USMCA). Those vehicles will be subject to a tariff only on their non-American-produced content.
  • Importers of engines, transmissions, powertrain parts, and electrical components will begin to pay a 25% duty starting May 3rd. The USMCA will again create exceptions for the parts and components produced under the rules of the agreement.

In the short term, these disruptions may cause buyers to purchase on-the-ground vehicles which have not been subject to the tariffs, while tightening inventory supply and driving prices upward as this dynamic situation unfolds. We anticipate continued changes in tariff rates and policies in the weeks and months ahead, while countries and auto manufacturers and suppliers negotiate with the Trump Administration for concessions.

Southgate Lease Services is not standing still. Our team is actively engaged across the industry—monitoring trends, adjusting sourcing strategies, and working diligently with our OEM and preferred fleet network to identify creative, customized solutions that meet your evolving fleet needs. We pride ourselves on being nimble, proactive, and responsive, and we are fully committed to helping you navigate these challenges with confidence.

As your trusted fleet advisor, we will continue to adapt our recommendations in real time, ensuring that you are equipped with the most strategic, up-to-date options available. This is a fluid situation, and we will remain transparent and communicative every step of the way.

We encourage you to connect with your Southgate Commercial Transportation Consultants to discuss your current and future fleet strategy:

Thank you for your continued partnership. We are here to support you—now more than ever.