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Tariff Impact on the U.S. Heavy Equipment Market: Dealership Challenges and Recruitment Insights
22 Sept, 20254 Minutes
Tariffs continue to reshape the U.S. heavy equipment sector, with new measures extending restrictions on imported steel and aluminium. While OEMs are the first to absorb higher costs, the greatest pressures are often felt by dealerships. They face squeezed margins, disrupted supply chains, and increasingly price-sensitive customers, forcing them to rethink their sales and service strategies.
In this article, we explore how tariffs affect U.S. dealerships, the shift toward aftermarket services, and why strong leadership talent is crucial for long-term resilience.
Contact CSG Talent today to build the leadership team required to adapt and succeed.
Direct Impacts of Tariffs Through the Supply Chain
Rising Production Costs
With over 400 new product categories recently added to Section 232 tariffs, OEMs are facing duties of up to 50% on essential materials and components. Caterpillar, for example, has warned of additional annual expenses of up to $1.5 billion, with these costs flowing downstream and forcing dealerships to either raise prices or absorb reduced profit margins.
Equipment Affordability
For farmers, contractors, and miners, this results in higher list prices and reduced affordability. In agriculture, the cost of combining corn has jumped from $37.60 per hour in 2019 to $54.40 in 2025, with much of the increase tied to machinery costs. Customers are then forced to delay purchases or scale back orders, which leaves dealerships with slower sales cycles and increases reliance on rentals or used equipment.
Market Competitiveness
Tariffs can disrupt market competitiveness by creating an imbalance between global and domestic manufacturers. Large OEMs can often absorb the impact of tariffs by shifting production to different regions, which helps them maintain their profit margins, but smaller domestic OEMs lack this flexibility. This makes them more vulnerable to reduced profit margins and losing market share to their larger competitors.
Tariff Impacts on Heavy Equipment Dealerships
Challenges for Dealers Representing Foreign OEMs
Dealers working with non-U.S. manufacturers such as Kubota, SANY, or Liebherr face the most direct consequences of tariffs. Finished machinery and imported parts have become significantly more expensive, forcing many dealers to increase list prices to remain profitable. These increases make foreign-branded machines less competitive against those produced domestically.
Uncertainty around tariffs also disrupts global supply chains, with customs delays and moving production bases creating longer lead times. Customers are left waiting for equipment availability, which can reduce sales and restrict rental fleet growth. As a result, many contractors and fleet owners are opting for used equipment or long-term rentals instead of investing in new machinery.
Challenges for Dealers Representing U.S-Based OEMs
Dealers representing U.S. brands such as Caterpillar and John Deere are also at risk. Although their equipment is assembled domestically, both manufacturers rely heavily on imported components such as steel, aluminium, engines, and electronics. Tariffs on these materials push production costs higher, and those increases are ultimately passed down to dealers and their customers.
Dealers then have to find a balance between a price-sensitive customer base and rising wholesale costs. Passing on these increases risks impacting sales in a market already facing economic uncertainty and high interest rates, but absorbing them shrinks profit margins. Even for dealers representing strong domestic brands, the overall increase in equipment costs is weakening demand and reducing sales volumes.
The Shift from Sales to Service in Dealerships
Maximising Revenue from Extended Equipment Lifecycles
Customers are now keeping machinery in operation for longer periods of time, creating increased demand for parts and servicing to maintain older fleets. Dealers are capitalising on this trend by emphasising their role as the primary source of genuine OEM parts and certified repairs, creating long-term revenue streams with higher profit margins.
The Growth of Service Agreements and Predictive Maintenance
Service and maintenance contracts are becoming increasingly crucial to dealership strategies as they provide customers with predictable costs while guaranteeing recurring income for dealers. Advances in telematics and remote monitoring are also allowing dealerships to take a more proactive role by offering predictive maintenance to prevent breakdowns and secure service work earlier.
Investment in Technicians and Parts Infrastructure
Dealers are also strengthening their aftermarket capabilities by investing in training for technicians and optimising their parts supply chains. With tariffs increasing the price of imported components, managing parts inventories effectively has become essential to reducing downtime for customers and maintaining competitiveness. Skilled technicians and reliable product support are now powerful differentiators that help dealers build customer loyalty in an increasingly challenging market.
Dealers must strengthen their aftermarket capabilities by investing in training for technicians and optimising their parts supply chains. With tariffs increasing the price of imported components, managing parts inventories effectively has become essential to reducing downtime for customers and maintaining competitiveness. Skilled technicians and reliable product support have always been cornerstones to a successful dealership, but now more than ever they are crucial to help dealers build and maintain customer loyalty in a challenging market.
Tariff Impacts Across End-User Industries
Agriculture and Farming
Agriculture is particularly exposed to tariff pressures as it faces both rising machinery costs and higher input prices. 25% tariffs on Canadian fertiliser imports, including potash and nitrogen, have pushed prices up by more than $100 per ton. This combined with higher costs for tractors and harvesters means dealerships serving the agricultural sector are seeing slower sales and growing demand for used equipment and service contracts.
Mining
Mining operations depend on specialised, high-value equipment, and even small price increases can trigger investment delays, which impacts dealerships supplying or servicing fleets in this sector. Delayed projects also ripple across industrial supply chains, reducing demand for new machinery and slowing dealership sales pipelines.
Construction and Infrastructure
The construction sector is also impacted, as equipment such as cranes and excavators are all becoming increasingly expensive, which raises costs for both commercial and infrastructure projects. Contractors already face labour shortages and tight deadlines, so they are becoming increasingly cautious in new equipment purchases, putting pressure on dealerships. In this environment, flexible financing, rental options, and long-term servicing contracts become essential tools for maintaining customer relationships.
Secondary Tariff Consequences for Dealerships
Supply Chain Disruption
As well as increasing costs, tariffs also disrupt supply chains. A 2025 survey by the National Association of Manufacturers found that 62% of firms cited sourcing critical machinery as a major barrier to reshoring, even with government incentives in place.
While tariffs are intended to boost domestic production, the reality is that U.S. suppliers cannot always meet demand at the scale or speed required, leading to longer lead times and further project delays.
Workforce and Leadership Pressures
As profit margins tighten, many OEMs and dealerships are forced to reduce costs elsewhere, often through workforce cuts. However, dealerships cannot afford to lose skilled technicians, aftermarket specialists, or commercial leaders at a time when customer expectations are evolving. A shortage of senior-level talent could leave dealerships underprepared to capitalise when demand rebounds.
The Value of Executive Leadership in Heavy Equipment Dealerships
Dealerships look very different to how they did a decade ago, as dealers must now manage tariff-driven costs, build aftermarket service models, integrate digital telematics, and support customers facing uncertainty. This requires leaders who can balance financial discipline with long-term strategy.
Executive search within the heavy equipment dealership sector provides access to senior talent who bring both technical knowledge and strategic expertise. Forward-thinking leaders are essential to help dealerships adapt their revenue models, invest in service infrastructure, and strengthen customer loyalty through market disruption.
Heavy Equipment Recruitment Experts at CSG Talent
At CSG Talent, our heavy equipment recruitment experts understand the unique pressures facing dealerships today. With deep sector knowledge and a global network, we connect businesses with senior leaders who combine operational expertise with the ability to drive change. By securing dealership talent now, organisations can build the resilience needed to navigate tariff uncertainty and capitalise when the market strengthens.
Contact CSG Talent’s heavy equipment recruitment experts to secure senior-level leadership talent.
