Here’s What Tariffs Cost Major Construction Equipment Manufacturers in 2025

Among the many challenges for the construction industry in 2025, one that struck equipment manufacturers the hardest — both in finances and long-term manufacturing plans — was new U.S. tariffs.

The taxes on foreign-made goods have raised the cost for many construction equipment manufacturers, foreign- and domestic-based.

In this report, we look at how some major construction equipment manufacturers reacted and how much the tariffs cost them.

But first, a little background.

How We Got Here

The saga began April 2 when a series of reciprocal tariffs were issued by the Trump administration, with the stated goal of rebuilding the U.S. economy and strengthening the country’s international economic position. The White House said a 10% tariff on all countries took effect April 5, made possible by Trump invoking authority under the International Emergency Economic Powers Act of 1977.

In the months since then, tariffs from the U.S. government have ebbed and flowed. The April 2 reciprocal tariffs were paused by the administration just one week later. The administration has been securing new trade deals with several countries, and the issue remains fluid.

Then last month, the U.S. Supreme Court ruled that Trump lacked the jurisdiction to implement the tariffs he announced through the International Emergency Economic Powers Act. Though the IEEPA does allow the president to “regulate…importation,” SCOTUS found the law does not authorize the president to impose tariffs, which the court characterized as “unbounded in scope, amount and duration.”

As a result, Trump announced he would sign an executive order imposing a global 10% tariff under Section 122, on top of tariffs already being charged, and would order several investigations “to protect our Country from unfair Trading practices.” Those Section 122 tariffs, by law, will have a 150-day expiration date.

Shortly after that announcement, Trump posted on TruthSocial that he would raise that 10% global tariff to 15%.

How Equipment Manufacturers Responded

Meanwhile, some construction equipment manufacturers have planned changes to their manufacturing footprints in the wake of Trump's tariffs that began in 2025:

• JCB issued a statement on April 2, 2025, confirming it will increase the size of its under-construction manufacturing facility in San Antonio, Texas. The $500 million project will now include 1 million square feet of factory floor, will employ 1,500 people and begin production next year, the company says.
  “In the short term, the imposition of tariffs will have a significant impact on our business,” said JCB CEO Graeme Macdonald at the time. “However, in the medium term, our planned factory in San Antonio will help to mitigate the impact. We are thankful that the tariff is only 10%, and we can only hope that the UK Government will conclude negotiations on a trade deal in the coming days and weeks.”
• In May 2025, Sakai announced that production of its 54-inch SV204 soil compactor would move from Japan to the company’s facility in Adairsville, Georgia. The company said the production shift means all soil compactors sold in North America will be domestically built, underscoring its commitment to the region. Sakai also said it is working to localize sourcing of components.
• LiuGong North America President Andrew Ryan confirmed in a May 7, 2025, interview with Equipment World that the company is taking a serious look at making some of its machines in the Americas, though work was underway on this feasibility study before the initial tariff announcements.
• Volvo Construction Equipment announced in June 2025 that its sole U.S. manufacturing facility will add new production lines in the first half of 2026 through a $261 million global production investment. The Shippensburg, Pennsylvania, plant will be expanded to produce midsize and large crawler excavators, as well as four new wheel loader models. The expansion will include new assembly lines and more automation technology.
• On January 27, 2026, John Deere reiterated a planned $70 million expansion of its excavator plant in Kernersville, North Carolina, which will add to existing production and bring an estimated 150 jobs. After this expansion, which was first announced in 2024, Deere says, the campus “will produce the only excavator designed, developed and manufactured in the U.S.”

What Did the Tariffs Actually Cost OEMs?

In addition to short-term and long-term pressure on their manufacturing supply chains, the new tariffs carry an immediate cost to manufacturers bringing any equipment into the U.S. Here’s a look at what some of the major OEMs reportedly spent on tariffs in 2025:

Caterpillar — The company estimated its incremental tariff costs for 2025 at around $2.6 billion.

The company reported $1 billion in rising manufacturing costs in its fourth quarter alone, driven primarily by higher tariffs. Caterpillar’s construction equipment segment saw $420 million in higher manufacturing costs in the fourth quarter, contributing heavily to that segment’s operating profit loss in the quarter.

Caterpillar also expects around $2.6 billion in incremental tariff costs in 2026.

CNH Industrial — The Case and New Holland parent predicted a gross impact of $205 million to $225 million during its third-quarter 2025 earnings, including a $60 million to $70 million impact on its construction equipment business.

Looking ahead to 2026, CNH Industrial forecasts tariff costs in its agriculture equipment division to grow about 2% and grow around 5% for its construction equipment division.

John Deere — For its full fiscal-year 2025, John Deere reported paying $600 million in tariff expenses and saw a $125 million increase in fourth-quarter production costs driven by rising tariffs.

Manager of Investor Communications Chris Seibert said during the earnings call that 2025 was a demanding year for Deere’s construction and forestry segment, “as we faced increased competitive price pressure and the highest level of tariff exposure among our business units.”

John Deere forecasts a pre-tax direct tariff expense of around $1.2 billion in its 2026 fiscal year.

Komatsu — In its third-quarter earnings report released January 30, 2026, Komatsu estimated the full-year costs of new U.S. tariffs at $580 million.

Kubota — For 2025, Kubota reported a negative impact on its operating profit of roughly $420 million in U.S. tariff costs.

Kubota estimates U.S. tariffs will cost $190 million in its 2026 fiscal year.

Volvo CE — Spread across Volvo Group’s entire business, the company reported tariff net costs of $54 million in third-quarter 2025 and a fourth-quarter impact of $75 million to $100 million. Volvo did not release tariff figures for its first two quarters of 2025.

Looking to 2026, Volvo Group expects a net tariff impact of $100 million in its first quarter.

Volvo CE currency conversions are as of March 11, 2026; Kubota currency conversions as of February 18, 2026; Komatsu currency conversions as of February 2, 2026.