Elevators
Sourcing Guide & Market Intelligence

Tariffs to negatively impact the industrial manufacturing and processing machinery sector

• The Trump Administration’s reciprocal tariffs, which apply general tariff rate increases to most leading US trade partners, are set to take effect on August 7, after the administration finalized the rates on August 1. As a result, leading sources of industrial equipment imports face significantly increased tariffs, including Canada (35.0%), China (54.0%), the European Union (15.0%), Japan (15.0%), Mexico (25.0%), and South Korea (15.0%).
• Additionally, the administration increased tariffs on aluminum and steel, common input materials for industrial machinery, to 50.0%, which is likely to increase input costs for suppliers operating inside the United States.
• China, Mexico, and Japan are three of the top sources of US machinery imports, accounting for about 50.0% of US imports in total. In addition to the increased costs from tariffs on these countries, the Japanese and Mexican machinery sectors could face increased financial risk as a large share of their revenue comes from US clients.
• According to the Association of Equipment Manufacturers, the increase in tariff rates on steel and aluminum in 2018 led to a 78.0% increase in domestic equipment production costs, a trend that may be repeated following the latest increases in steel and aluminum tariffs.
• Suppliers that source machinery or parts from tariff-affected countries may see supply chain disruptions or extended lead times as they seek alternative suppliers to mitigate tariff impacts. In addition, buyers seeking to rent industrial machinery will likely see higher rental rates as dealers pass on higher costs and possibly limited available units if supply chain issues occur.

Increased tariffs on copper imports take effect

• On August 1, the Trump administration implemented 50.0% tariffs on imported copper. Chile and Canada will be most impacted by these tariffs, as they account for a combined 87.0% of all copper imports in the United States.
• However, these tariffs are less sweeping than initially expected, only applying to semi-finished copper products, while excluding high-purity refined copper and copper input materials, such as ore and concentrate. As leading importers, such as Chile and Canada, have both high copper mining and refining capacities, they will likely avoid most of these tariffs by either exporting the copper in its unrefined form or refining the copper before exporting it to the United States
• These copper tariff exemptions limit the impact on the electronics and electrical equipment sectors because these applications require refined copper due to its optimal conductive properties.
• Thus, the prices of metal alloys that include copper, consumer products made from copper, tools, plumbing, corrosion-resistant alloys, and construction materials made from copper are forecast to rise by an average of 39.2%, according to the Yale Budget Lab.

United States announces new tariffs on all imported steel

• In February 2025, the United States announced 25.0% tariffs on all imported steel with no exemptions or exceptions. The tariffs took effect on March 12, 2025. On June 4th, these tariffs were increased further to 50%. These tariffs were not impacted by a recent court decision that temporarily suspended duties on certain goods as they were implemented under Section 232 of the Trade Expansion Act.
• Previously, countries such as Canada, Mexico, and Brazil, the top exporters of steel to the United States, had exemptions from tariffs. These have now been removed and all imported steel, regardless of origin, will be subject to the 50.0% tariff. However, on May 8th, the US announced an agreement with the United Kingdom to remove all levies on steel exported from the UK.
• When tariffs on steel imports were introduced in March 2018, they contributed to an increase in the price of steel and steel products. According to the Bureau of Labor Statistics, the price of steel-milled products increased by 10.2% in the year after the tariffs were implemented. This market heavily relies on steel as an input and may be impacted by this policy.