How Tariffs Are Impacting the Crane and Heavy Equipment Financing Market
February 28, 2026
Intended to protect domestic industries and jobs and to provide a more equitable international market for U.S.-made products, tariffs have long been used as a tool of trade policy. However, they can also have far-reaching and unintended consequences — especially for the crane and heavy lifting industry, where tariffs affect the import of new and used equipment and parts, increase material costs, and cause supply chain disruptions. At the same time, they are raising concerns in the banking and lending industry that supports and finances the acquisition of high-value commercial assets.
Currently, there is a minimum baseline tariff of 10% on many products imported to the U.S., which took effect on April 5th. The average effective tariff rate is 17.8% — the highest in almost 90 years. China is facing a 30% tariff, while tariffs on imported aluminum and steel from various countries range from 25% to 50%. It should be noted that the USMCA (United States–Mexico–Canada Agreement) trade agreement remains duty-free.
The administration's stated goal when enacting new tariffs is to protect and enhance the domestic economy and bring nations to the negotiating table regarding international trade. The situation remains fluid, as agreements could be reached any day between the U.S. and other countries. As a result, significant apprehension exists among customers, dealers, and banks alike.
Dealers and customers are hesitant to make purchases subject to tariffs because at the end of the 90-day review period, the tariff could potentially be lifted. Since there is no way to be reimbursed for a tariff once it has been paid, dealers are holding off on importing equipment and customers are delaying purchases — uncertain whether equipment will arrive before the 90-day extension expires. The result is a great deal of "wait and see" across the market.
If tariffs are enacted at the end of the 90-day period and made permanent, that is a scenario the finance world can address. It is not easy, but it is workable. Banks and finance companies typically prefer not to overadvance on equipment with soft costs such as taxes and shipping. Customers who are financially strong can generally seek financing and leasing options that include soft costs in the finance amount.
However, companies with a moderate or mid-to-low financial rating may face greater challenges and could be required to mitigate credit risk with larger down payments or additional collateral. These companies may be perceived as a greater risk, and lenders may be less inclined to overadvance on equipment loans.
The core concern is that should the financing source need to recover the asset, they could find themselves underwater with an undervalued piece of equipment due to the tariff on the initial purchase. As a solution, banks may require customers to pay the tariff out of pocket — which could significantly impact business cash flow — or the customer may decide they simply cannot afford to buy the equipment at all.
If a tariff is enacted after the 90-day pause and then rescinded later in the year or the next, it will cause a major issue for the banking and financing industry. Some portfolios may become over-advanced or exceed credit risk Loan-to-Value (LTV) margins. For banks, this could create regulation and compliance issues that factor into their Financial Stress Test formula. There is also potential for a portfolio credit risk scenario resulting in tighter credit policies and higher pricing, which may be required to satisfy Federal Regulators' portfolio risk concerns.
The uncertainty surrounding tariffs is causing significant issues in the equipment market as well. Dealers and customers alike are concerned about overpaying. Should a piece of equipment be imported and purchased while tariffs are in place, the customer or dealer will need to absorb that cost. As a result, many customers and dealers are delaying or canceling orders until there is resolution on tariffs.
Adding even 10% to the cost of any crane or heavy haul equipment can range from $100,000 to $500,000 or more. This creates a major cash-flow impact because customers may need to pay the tariff out of pocket, or if the lender agrees to finance the tariff, it could significantly increase monthly loan payments. In some cases, the tariff cost is like adding a piece of equipment to your fleet without gaining any revenue or income advantage.
One might initially think domestic crane and equipment manufacturers would benefit from tariffs because they could keep prices lower while foreign competitors add tariffs to their costs. However, domestic manufacturers often need to import components or raw materials for those components, which creates pricing complexity. For example, what percentage of the components carry tariffs, and can they be absorbed by the manufacturer or passed to the customer? Ultimately, this could reduce the cost savings of purchasing from a domestic manufacturer.
The cost of domestically sourced used equipment may initially receive a value boost from tariffs. This could enable funding sources to accept higher values for financing and potentially advance at 100% of the new value over time. However, as customers try to purchase equipment already located in the U.S. to avoid tariff costs, we may see a surge in pricing due to supply and demand dynamics. If minimal equipment is being imported, it will create high demand for what is available domestically — and prices will rise due to limited supply.
The uncertainty with tariffs is also causing project delays and reduced capital investment until there is more clarity. Small to mid-sized contractors, who may not have the same financial flexibility as large firms, are particularly vulnerable. As a result, some companies may be unable to add equipment to their fleet. As an alternative, they may extend the lifespan of older machinery — which typically raises maintenance and repair costs — or decide to rent.
While renting can be a solid option, if there is minimal capital investment by crane and heavy equipment rental companies, there may be a shortage of equipment in the market. Under this scenario, bare rental rates can become more expensive, which affects both cash flow and job profitability.
For now, the best approach for manufacturers, lending institutions, and especially buyers is to prepare a plan to move forward with acquisitions. Once there is clarity about tariffs, the equipment market may become extremely active through next year. Being ready to act quickly when the dust settles could be a significant competitive advantage.
— Harry Fry, President of Harry Fry & Associates
