Tariff Relief Gives Equipment Makers a Break, But It Won’t Last

The construction equipment industry has been dealing with rising production costs, supply chain disruptions and trade uncertainty over the last few years. But now for some good news. The US government has implemented temporary changes to Section 232 tariffs that may reduce the financial strain for many equipment manufacturers through the end of 2027.

Although this announcement is expected to lower costs for some agricultural and construction equipment, it does not address the issues facing the industry. Instead, it gives manufacturers a brief window to ramp up operations before the original tariff structure could snap back into place. Here’s what the latest modifications mean for equipment manufacturers, dealers and buyers.

What Has Changed with the New Tariff Rules?

The latest proclamation by the Trump administration makes temporary changes to Section 232 tariffs on steel, aluminium, and copper. These changes took effect on June 8, 2026, and will remain in effect until the end of 2027.

One of the biggest changes is the reduction of tariffs from 25% to 15% for certain agricultural, construction, and mobile industrial equipment imported from qualifying trade partners. At the same time, the government has relaxed the rules for products claiming U.S.-made steel content, lowering the threshold from 95% to 85%. Products made abroad with at least 85% U.S. steel or aluminum will also be eligible for lower duties. Products governed by the USMCA agreement will get extra flexibility through lower duties on their non-U.S. content.

Why These Changes Are Important to Equipment Makers

Steel and aluminium remain among the most important materials used in the manufacture of construction equipment. Whether it is excavators, wheel loaders, bulldozers, cranes, or motor graders, the rising metal prices directly increase the production cost.

Cutting tariffs on some equipment and materials could save manufacturers that rely on global supply chains a bundle over the next 18 months. These savings could help companies manage inflation, improve production planning, and ease some of the financial pressure that has built up since higher tariffs were introduced.

But these are temporary measures, and it is unlikely that manufacturers will make long-term business decisions based solely on this relief. Many firms will continue to emphasize supplier diversification and increased domestic production where feasible.

Big Equipment Brands Are Still Feeling the Heat

Some global manufacturers reported good sales in parts of their business, but tariffs remain a drag on profitability.

Caterpillar, for example, reported good demand for equipment and higher operating profits, but also reported hundreds of millions of dollars in extra manufacturing costs related to tariffs. The costs of tariffs are expected to be more than $2 billion in 2026.

CNH Industrial, the parent of Case Construction Equipment and New Holland Construction, also reported weaker construction equipment earnings. Lower sales in North and South America, higher tariffs, and higher labor costs led to lower profitability even with improved pricing.

Komatsu reported flat global equipment sales, but operating income fell as rising costs offset revenue gains. Kubota reported strong top-line and profit gains, but management acknowledged that U.S. tariffs added about $150 million in costs in the quarter.

Volvo Construction Equipment had an even tougher challenge. Rising operating costs, supply-chain issues, and continued global trade uncertainty were major factors in the company’s decision to close its Rokbak articulated hauler business, it said.

Taken together, these results point to an important fact: high demand for equipment is not enough to protect manufacturers when production costs keep increasing.

Which equipment categories are benefited?

The temporary tariff reduction applies to a broad range of heavy equipment used in construction, mining, logistics, and infrastructure projects.

Eligible categories include:

• Motor graders
• Bulldozers
• Wheel loaders
• Track loaders
• Hydraulic excavators
• Backhoes
• Road rollers
• Scrapers
• Forklifts
• Mobile cranes
• Track-type tractors
• Various replacement parts and attachments

For companies that import or distribute these machines, the temporary reduction may help with purchasing flexibility and inventory planning.

What this could mean for buyers of equipment

Lower manufacturing costs don’t always translate into immediate price cuts, but they can help slow price increases in the future.

More stable dealer inventory costs and better equipment availability for buyers could be realized with increased manufacturer production during the relief period. Contractors looking to upgrade their fleets may find the next 18 months to be a more buyer-friendly market than the industry has seen in recent years.

That said, don’t expect buyers to get dramatic price cuts. Equipment prices will continue to be affected by tariff policies, material costs, labor costs, shipping rates and global economic conditions.

Industry Groups Applaud the Choice

Construction equipment groups have welcomed the temporary changes.

Industry leaders say the reduced tariffs will help lower manufacturing costs, strengthen supply chains and provide companies with more time to scale up domestic production. Trade certainty remains critical for long-term investment and infrastructure development, said organizations representing equipment manufacturers and distributors.

Many companies are still pressing policymakers to establish steady trade policies that enable manufacturers to plan years ahead, rather than respond to short-term tariff shifts.

Temporary win, but not a permanent solution

The latest tariff changes provide meaningful relief to construction equipment manufacturers but should be viewed as a temporary opportunity rather than a permanent fix.

Most of the big manufacturers are still dealing with higher production costs, supply chains that are moving around, and unclear global trade conditions. While the lower tariffs could help financial performance over the next year and a half, in the longer term competitiveness will still be a function of efficient manufacturing, resilient sourcing strategies, and stable international trade policies.

Contractors, dealers and equipment buyers will continue to need to monitor these policy changes closely as government decisions continue to impact equipment availability, production costs, and market pricing throughout the heavy equipment industry.

Looking to invest in reliable heavy equipment while market conditions remain favorable? MY Equipment offers a wide selection of quality used construction machinery from leading global brands. Explore our inventory today and let our team help you find the right machine for your next project at a competitive price.

Don’t forget to subscribe to our YouTube channel for more equipment offers and insights into the industry.