Heavy machinery prices rise as tariff concerns persist

Equipment finance continues to tighten, particularly for steel-heavy machinery, transportation and supply chain operations following the second postponement of tariffs of 10% to 50% on U.S. trading partners.  

The effect of tightening equipment availability varies by industry, with sectors that rely heavily on imported machinery facing more challenges, Dennis Bolton, senior managing director and head of North America equipment finance at asset management firm Gordon Brothers, told Equipment Finance News. In contrast, industries like transportation, which largely depend on domestically manufactured equipment, likely face less significant constraints. 

“If it’s an industry that is characterized by a lot of foreign-built machines that we import, then that’s going to be challenging,” he said. “Any machines in that space that are used and available will have high demand so, in those instances, you’ll see price acceleration on those.” 

In the construction industry, machinery and equipment prices went up 2% between May 2024 and May 2025, according to the U.S. Bureau of Labor Statistics’ Producer Price Index. Most of the increase, however, came following the March 2025 implementation of steel and aluminum tariffs, rising 1.5% between March and May.

Latest tariff pause

The latest pause in implementation of the tariffs, which were to take effect July 9, has delayed higher duties for many countries until Aug 1, lowering the effective tariff rate from a peak of 30% to around 14% for all industries, but extending uncertainty that hinders capital spending, according to a July 8 Wells Fargo research note. Rates could climb from 16% to 20% depending on country-specific actions and other reversals.  

Most OEMs cite tariffs as a key obstacle to manufacturing activity, according to the note. 

The challenge for appraisers and asset managers is that high tariffs, such as the 55% levied on Chinese equipment, forces a another look at traditional valuation models, since the inflated purchase price affects residual values and loan-to-value ratios, Bolton said. 

“If the tariffs go away, then you’ve got a whole lot of economic obsolescence in that machine that you paid when you paid the 55% tariff to buy it,” he said. “A lot of it will come down to — as it always does — the client, but it’s definitely going to cause some head scratching.” 

Transportation, construction in flux 

New Environmental Protection Agency and California Air Resources Board rule rollbacks have also disrupted expectations in the trucking market, eliminating the anticipated pre-buy surge that industry experts anticipated as a result of the emissions standards and contributing to declining build rates as fleets sit on unused equipment, Bolton said.  

On the construction side, demand will hinge on pending tax legislation and shifts in green energy policy, including potential cuts to EV and renewable energy incentives, he said. 

“Everything is in a state of flux.” — Dennis Bolton, senior managing director and head of North America equipment finance at asset management at Gordon Brothers

“Everybody is going to take a very middle-of-the-road approach to their decision-making and their future plans until they get better clarity, directionally, of which way this is going, because right now, it’s like a pendulum swinging back and forth,” he said.

That pendulum makes tailoring financing solutions by sector essential. For example, factors including fleet type, usage patterns and operational scope vary significantly between transportation and construction, Kirk Mann, executive vice president and head of transportation at Mitsubishi HC Capital America, told EFN. 

“There are ways of accomplishing this, but it requires the customer to go deep with us and to help us understand their business in a way that enables our ability to design something that really works,” he said. “Finally, finance companies need to be very good with digital platforms to make the financing process a little easier and certainly faster.” 

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