How The 2026 Tariff Changes on Construction Equipment Affect Manufacturers, Dealers, and Buyers

The construction equipment industry has received some relief, but no one in the industry sees it as a long-term solution.

On June 1, 2026, the Trump administration announced changes to Section 232 tariffs on steel, aluminium, and copper that will directly affect heavy construction equipment manufacturers. The new rules became effective on June 8, 2026, and will remain in effect until the end of 2027. For equipment manufacturers who have been dealing with high production costs, supply chain pressure, and uneven demand for the past few years, the announcement comes as a welcome respite rather than a solution.

Here’s what changed, who was affected, and what it really means for contractors and dealers looking to buy equipment in the coming months.

What Changed in the Tariff Rules?

The revised proclamation makes four specific changes that affect construction and agricultural equipment manufacturers:

Tariffs on certain machinery were reduced from 25% to 15%. The reduction applies to a broad list of construction and industrial equipment covered under Annex I-C, including bulldozers, graders, loaders, excavators, forklifts, cranes, and related parts and components.

The qualification threshold for steel manufactured in the United States was reduced from 95% to 85%. This allows manufacturers to source materials from around the world while still qualifying for lower tariff treatment, which is a significant shift for businesses with mixed supply chains.

Products that use mostly US metals receive an additional discount. Equipment manufactured overseas with at least 85% U.S. steel, aluminium, or copper by weight can now receive a 10% tariff reduction from standard rates.

USMCA products are now taxed solely on non-US content. Equipment and components traded under the USMCA framework will be subject to a 25% duty on the portion of the product that is not American-made, rather than the entire product value.

The White House’s stated goal is to strike a balance between national security concerns and support for American manufacturing, agriculture, housing, and infrastructure, a framework that the industry broadly supports, even if opinions differ on how to implement it.

Why Does This Matter for Equipment Manufacturers?

One of the most persistent cost pressures OEMs have faced over the past several years has been tariffs on imported metals. Even manufacturers with large North American footprints rely on global supply chains for their engines, hydraulics, electronics and steel components. Every rise in tariffs on those inputs is passed through to production costs, then to equipment prices.

The Q1 2026 earnings results from major manufacturers make the scale of the problem clear:

Caterpillar posted a 20% increase in operating profit for Q1 2026 to $3.1 billion, solid numbers on the surface. But the company also incurred an additional $710 million in manufacturing costs, mostly related to tariffs, and its projected full-year tariff impact is $2.2 billion to $2.4 billion. Even a company as successful as Caterpillar is carrying a heavy tariff load.

CNH Industrial, owner of CASE and New Holland, said its construction equipment sales were down 3% year-over-year, with the segment reporting a $28 million adjusted operating loss. Higher tariffs, inflation in labor, and lower volumes all played a part.

Komatsu kept its global construction and mining equipment sales slightly positive, but operating income fell 18 percent as rising costs ate into revenue gains.

Kubota reported strong revenue and profit growth, driven by improved pricing and higher sales volumes, but still incurred around $150 million in U.S. tariff costs during the period.

Volvo Construction Equipment has announced it will close its Rokbak articulated hauler business because of rising operational costs, supply chain problems and pressure from tariffs.

What all of these findings have in common is this: manufacturers can still sell equipment, but tariffs are steadily eating away at the margins they earn doing so.

Here’s what the industry groups are saying:

Trade associations responded to the announcement quickly and positively, though their statements all carried the same underlying message: short-term relief is welcome, but the industry needs long-term certainty to make real investment decisions.

This is an important step in reducing input costs, strengthening supply chains, said the Association of Equipment Manufacturers (AEM). Manufacturers need time and stability to develop domestic production capacity, said Senior Vice President Kip Eideberg. Reshoring cannot happen overnight in response to an 18-month tariff window.

The Associated Equipment Distributors (AED) concurred. Construction and agricultural machinery are critical to infrastructure projects, mining, and farming, said President and CEO Brian P. McGuire. When companies are making long-term investment plans, they need predictable, consistent trade policy.

Both responses amount to the same thing: the industry welcomes the breather but requires something more permanent than short-term relief to make major decisions on supply chains and manufacturing capacity.

What Types of Equipment Are Covered

The tariff reduction covers a wide variety of machines that are widely used in construction and industrial operations. The items covered by Annex I-C are:

• Bulldozers & angle dozers
• Motor graders & levelers
• Road rollers and scrapers
• Wheel loaders, tracked loaders
• Backhoes and excavators
• Material Handlers & Lifts
• Mobile cranes and drilling equipment
• Different machine components and attachments

That’s a long list. The policy could impact pricing and production planning across the heavy equipment segment as a whole, as it covers in some fashion most of the core equipment categories that contractors depend on day-to-day.

Will contractors and buyers actually see lower prices?

Maybe, but not soon and probably not in any dramatic fashion.

Manufacturers say that raw material costs, labour inflation, freight expenses, and currency pressures are high and not dependent on tariff policy. Many OEMs have already raised equipment prices substantially over the past few years, and those increases are not going to reverse quickly simply because one input cost fell by 10 percentage points.

The more realistic near-term impact is on planning and margins. The tariffs can be lowered to give manufacturers some room to stabilize costs and protect profitability without raising prices That is something, it may prevent further price escalation even if it does not cause price reductions. For dealers and buyers, maintaining prices is still a better option than seeing them rise again.

The policy may also provide manufacturers with more confidence to continue investing in North American production rather than putting expansion plans on hold due to trade uncertainty. That has longer term implications for equipment availability and supply chain stability .

The Real Problem Is The Expiration Date

The most important detail in this entire announcement, and the one that gets the least attention, is that this relief expires at the end of 2027.

That window presents manufacturers with a familiar planning problem. Building new facilities, reshoring supply chains and expanding domestic metal production are multi-year investments. Companies need to know what the trade conditions will be not only through 2027 but also after 2027. The 18-month tariff window, while welcome, is not a long enough runway to make major structural decisions with confidence.

The industry was not permanently reset. It has a pause button. And everybody in the business knows the difference.

Implications for the Market of Used Equipment

While the direct impact feels a long way off, it is worth understanding the tariff changes for contractors and dealers in the used construction equipment market.

The demand for quality used heavy equipment stays steady or increases as the cost of new equipment to manufacture and purchase increases. 

That dynamic has been at work for the past two years and is not expected to change much with a temporary tariff relief. The price increases on new equipment have been significant and those are not going to turn around overnight.

If the temporary reprieve manages to steady OEM production costs and stave off further price increases for new equipment, it could slowly ease some of the pricing pressure that has been driving contractors to the used market. But that’s at least an 18-month process — not something buyers will see this quarter.

Meanwhile, the best bet is still to consider total cost of ownership, machine condition, parts availability and long-term value rather than wait for tariff-driven price reductions that may or may not happen.

Whether tariff changes impact pricing on new equipment or not, quality used construction equipment continues to be one of the smartest ways to control project costs. When you are in need of used heavy equipment, MY-Equipment has got you covered. We carry a wide selection of used heavy machinery, such as excavators, motor graders, wheel loaders, and dozers, available out of Houston, Texas. Browse our current inventory or contact with our team to find the right machine at the right price.

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