Presidential election ’24: Implications for the equipment finance industry

The future of the equipment finance industry will be a bit clearer after today’s presidential election resolves, but regardless of the outcome, dealers and lenders could see a boost in demand as many businesses have been on standby awaiting results.  

Republican Donald Trump in September threatened to hit agriculture and construction equipment manufacturer John Deere with a 200% import tariff, if it moves production to Mexico. Trump has also threatened to impose a 60% tariff on Chinese imports and a 10% to 20% tariff on all other imports.  

He imposed tariffs on more than $300 billion of Chinese goods during his previous term. Chinese equipment manufacturers include Sany, XCMG and Zoomlion.  

Democrat Kamala Harris argued that Trump’s proposed tariffs would increase tax burdens on the average household and cost the U.S. more than 1 million jobs, according to the Harris campaign. The tariffs could cause inflation to rise 1.3% above baseline in 2025, according to the campaign, citing the Peterson Institute for International Economics. 

EV mandates at stake? 

President Joe Biden’s administration in March finalized a rule that will require an increasing number of truck manufacturers to sell zero-emission vehicles starting in model year 2027, according to the Environmental Protection Agency. The rule is part of the Biden-Harris administration’s goal to reduce greenhouse gas emissions by at least 50% by 2030.  

Under the EPA rule, EV models could comprise 60% of new medium-duty trucks and 25% of Class 8 tractor sales by 2032, according to the Institute of Energy Research. 

Trump vowed to “end the electric vehicle mandate on Day One” if elected, during the Republican National Convention in July. Numerous truck dealers and trade groups have opposed the EV rules, arguing that they hurt an industry that had already made strides toward more sustainable practices.  

Post-election boost  

Many businesses in the heavy-equipment industry have delayed equipment purchases until after the election.  

“Probably 20% of contractors are holding off to see who gets elected,” Larry DuPaix, owner of Salt Lake City-based Atlas Machinery, previously told Equipment Finance News. “They want to see who our politicians are going to be coming out of November.” 

While some businesses may shape their strategies based on who wins the election, investment activity is poised to ramp up regardless of the outcome, Wintrust Specialty Finance President and Chief Executive David Normandin said during the recent Equipment Leasing and Finance Association convention in Austin, Texas.  

“I think getting the election out of the way, regardless of who wins, people will get back to work and invest in their businesses,” he said. 

A potential post-election boost contributed to equipment lender confidence reaching a 32-month high in September, according to the Equipment Leasing and Finance Foundation‘s monthly confidence index.