The Trump Administration issued a new Proclamation on June 1 adjusting Section 232 tariffs on steel, aluminum and copper, providing some agricultural and construction equipment manufacturers with temporary relief amid rising production costs.
Section 232, which primarily impacts imported metals and derivative materials, was implemented by Trump to “protect the national security of the United States, the economic resilience of vital industries, and the financial position of American families, communities, and businesses from the threat of low-priced foreign imports.”
The new Proclamation makes the following adjustments to the tariffs, effective June 8 through the end of 2027:
- A temporary tariff reduction from 25% to 15% on certain types of ag, construction and mobile industrial equipment identified in Annex I-C when imported from qualifying trade-deal countries. (See full list of equipment below.)
- A lower threshold for products to qualify as being made “entirely” from U.S. steel, from 95% to 85%.
- 10% lower tariffs on products made in another country with at least 85% U.S. metals, measured by weight.
- Special provisions for USMCA products, including a 25% duty on only the non-U.S. content of the product.
The White House positioned the modifications as a way "to more effectively address national security threats, spur investment in American agriculture, housing, and manufacturing, and facilitate U.S. production of related products."
In his Proclamation, Trump said, "In my judgment, this temporary modification appropriately accounts for these products’ roles in productive economic activity in the United States and accounts for recent circumstances affecting the relevant industries and services that use these products, while also allowing the tariff regimes to continue effectively addressing the national security threats found in Proclamation 9704 and Proclamation 9705."
Equipment manufacturers who source components globally and build machines overseas could see lower tariff costs under the new rules. The relief comes as OEMs continue to report mixed financial results, with many citing tariffs as a significant burden to their businesses.
Recent reports from OEMs highlight the ongoing impact:
- Caterpillar: Consolidated operating profit rose 20% to $3.1 billion in the first quarter, driven by a $940 million positive sales volume impact but hampered by an additional $710 million in manufacturing costs, largely reflecting higher tariffs. The company estimated its full-year 2026 tariff costs between $2.2 billion to $2.4 billion. Recently appointed CFO Kyle Epley said during the earnings call that this updated tariff cost estimate does “not currently include any IEPA-related refunds as the result of the Supreme Court's decision.”
- CNH Industrial (parent company of Case and New Holland): Global net sales in CNH’s construction equipment segment were down 3% year-over-year to $574 million. In the first quarter, the construction business posted a $28 million loss in adjusted earnings before interest and taxes. Key negative impacts included lower sales volumes in North America and South America, higher tariffs, higher trade show marketing costs, and labor cost inflation, all partially offset by improving equipment selling prices.
- Komatsu: While the Japanese manufacturer finished its 2025 fiscal year with net sales of construction, mining and utility equipment up globally and in North America, tariffs kept operating income down year-over-year. Global construction, mining and utility equipment net sales were up 0.2% in the full year to $24.1 billion, but global operating income for the segment fell 18% to $3.1 billion.
- Kubota: Consolidated revenue for the first quarter was up 13.7% to $5.1 billion, and operating profit jumped 59.1% year-over-year to $616.4 million. Key drivers for the profit growth included higher sales volumes of construction and agriculture equipment and price revisions in North America, though these effects were partially offset by higher costs from U.S. tariffs to the tune of roughly $150 million.
- Volvo CE: Volvo CE is shuttering its Rokbak articulated hauler business, citing rising operational and supply chain costs and global trade challenges, including U.S. tariffs. The company says these headwinds have “significantly impacted financial performance, making continued operation unsustainable.”
In response to the Proclamation, Association of Equipment Manufacturers (AEM) Senior Vice President of Government and Industry Relations Kip Eideberg, issued the following statement:
“AEM welcomes President Trump’s proclamation to reduce tariffs on agricultural and construction equipment. Especially at a time when our nation’s farmers are under increasing pressure, this action represents an important step towards lowering input costs, strengthening supply chains, and supporting American farmers and manufacturers. This proclamation is an encouraging sign that the Trump administration recognizes both the complexity of reshoring production and the need to provide manufacturers with the runway to expand domestic capacity.”
In a statement to Equipment World, AED President and CEO Brian P. McGuire, added:
“AED commends the Trump administration’s recent proclamation lowering the Section 232 tariffs on construction and agriculture equipment. The machinery AED members supply and manufacture is vital to maintaining infrastructure projects, critical mineral development, and agricultural production. Trade certainty is essential and efforts to strengthen alliances, such as USMCA, are vital to the companies that feed, fuel and build America. AED will continue to work with the president and his team to restore certainty to the global trade situation.”
Annex I-C: Section 232 Tariff on Full Value
Products listed under Annex I-C include:
| HTS Code | Description |
| 8427.10.40 | Self-propelled rider-type counterbalanced fork-lift trucks powered by an electric motor |
| 8427.10.80 | Self-propelled works trucks powered by an electric motor, fitted with lifting and handling equipment, nesoi |
| 8427.20.40 | Self-propelled rider-type counterbalanced fork-lift trucks not powered by an electric motor |
| 8427.20.80 | Self-propelled works trucks not powered by an electric motor, fitted with lifting and handling equipment, nesoi |
| 8427.90.00 | Trucks, fitted with lifting or handling equipment, nesoi |
| 8429.11.00 | Self-propelled bulldozers and angledozers, for track laying |
| 8429.19.00 | Self-propelled bulldozers and angledozers, other than for track laying |
| 8429.20.00 | Self-propelled graders and levelers |
| 8429.30.00 | Self-propelled scrapers |
| 8429.40.00 | Self-propelled tamping machines and road rollers |
| 8429.51.10 | Self-propelled front-end shovel loaders, wheel-type |
| 8429.51.50 | Self-propelled front-end shovel loaders, other than wheel-type |
| 8429.52.10 | Self-propelled backhoes, shovels, clamshells and draglines with a 360-degree revolving superstructure |
| 8429.52.50 | Self-propelled machinery with a 360-degree revolving superstructure, other than backhoes, shovels, clamshells and draglines |
| 8429.59.10 | Self-propelled backhoes, shovels, clamshells and draglines not with a 360-degree revolving superstructure |
| 8429.59.50 | Self-propelled machinery not with a 360-degree revolving superstructure, other than backhoes, shovels, clamshells and draglines |
| 8431.20.00 | Parts suitable for use solely or principally with the machinery of heading 8427 |
| 8431.42.00 | Bulldozer or angledozer blades suitable for use solely or principally with the machinery of headings 8426, 8429 or 8430 |
| 8431.49.90 | Parts suitable for use solely or principally with the machinery of headings 8429 or 8430, nesoi |
| 8701.10.01 | Single-axle tractors, other than tractors of heading 8709 |
| 8701.30.50 | Track-laying tractors, not suitable for agricultural use |
| 8701.91.50 | Other tractors of engine power not exceeding 18 kW, not for agricultural use |
| 8701.92.50 | Other tractors of engine power exceeding 18 kW but not exceeding 37 kW, not for agricultural use |
| 8701.93.50 | Other tractors of engine power exceeding 37 kW but not exceeding 75 kW, not for agricultural use |
| 8701.94.50 | Other tractors of engine power exceeding 75 kW but not exceeding 130 kW, not for agricultural use |
| 8701.95.50 | Other tractors of engine power exceeding 130 kW, not for agricultural use |
| 8705.10.00 | Mobile cranes |
| 8705.20.00 | Mobile drilling derricks |
