The latest round of US tariff escalation is hitting heavy equipment OEMs harder than any sector outside automotive. Caterpillar has disclosed $2.6 billion in annualized tariff exposure across its construction and mining segments. John Deere estimates $1.2 billion. Komatsu faces dual exposure: $580 million on US-bound imports and another $550 million on components flowing through its Japanese supply chain. Kubota rounds out the group at $190 million, concentrated in compact equipment.

Where the Costs Hit Hardest

Caterpillar’s $2.6 billion figure reflects tariffs on steel, aluminum, and finished components sourced from outside the US. The company manufactures globally, with major production in Japan, China, Belgium, and Brazil feeding US distribution. Its construction segment alone accounts for roughly $1.4 billion of the exposure, with mining equipment making up the rest.

Deere’s $1.2 billion hits construction and forestry harder than agriculture. The Wirtgen Group acquisition in 2017 brought significant European manufacturing into Deere’s supply chain, and those cross-border flows now carry 15-25% surcharges depending on metal content classification under the new Section 232 tiers.

Komatsu’s situation is unique. The $580 million US exposure comes from finished equipment and sub-assemblies imported from Japan. The additional $550 million applies to components Komatsu sources from Southeast Asia and China for its Japanese factories, which then export to global markets. Total effective exposure exceeds $1.1 billion.

Kubota’s $190 million is smaller in absolute terms but represents a higher percentage of its US construction equipment revenue. Nearly all Kubota compact track loaders and small excavators sold in North America are imported from Japanese plants.

How Price Increases Will Roll Through

OEMs have three levers: absorb costs, pass them to dealers, or restructure supply chains. All four companies have signaled price increases, with timelines clustering around Q2-Q3 2026.

Caterpillar implemented a 3-5% surcharge on select models in March 2026 and has indicated a second round of 4-7% in July. Dealers report that some high-demand models like the 320 excavator and D6 dozer are already priced 8-10% above January 2026 list.

Deere announced a flat 5% increase across construction and forestry lines effective June 1, 2026. Dealer sources suggest an additional 3-5% is being discussed for September, contingent on tariff levels remaining at current rates.

Komatsu has been more aggressive. A 7% increase on excavators and an 8% increase on wheel loaders took effect in February. Another 5% across all construction models is confirmed for August 2026. Cumulative increase since January: 12-13% on popular models.

Kubota raised compact equipment prices 4% in January and 3% in April. A third adjustment is expected in Q3.

Telehandler Market Spillover

Telehandler-specific pricing data from JLG, Manitou, and other specialists follows the same pattern. JLG (Oshkosh subsidiary) sources steel domestically but imports hydraulic components and electronics subject to tariffs. Manitou imports complete units from France and Italy, facing the full 15% equipment tier under Section 232.

For a standard 6,000-lb telehandler with a $45,000-55,000 list price, a 5-8% increase translates to $2,250-$4,400 per unit. Fleet buyers ordering 5+ units face $11,000-$22,000 in additional cost versus Q4 2025 pricing.

Used telehandler pricing has already responded. Clean 2022-2024 models with under 3,000 hours are trading at 85-92% of new list, up from the historical 75-80% range. The tariff-driven new price escalation is compressing the new-versus-used gap.

What Buyers Should Do Before Q3

Dealer inventories built before the tariff escalation still carry older cost bases. In-stock units priced from Q4 2025 or Q1 2026 allocations are $3,000-$8,000 cheaper than factory-order pricing at current tariff rates. That spread widens with each successive OEM price increase.

If your procurement timeline allows it, buy in-stock rather than factory-order through Q2 2026. After July, most dealer floor stock will reflect the new pricing.

For buyers who need equipment in Q3 or Q4, request binding price quotes now. Several dealers are still honoring 60-90 day quote validity on current pricing. A signed quote at today’s rate could save 5-8% versus the expected July-September pricing.

Rental rates have not yet fully absorbed the increases. National rental companies typically adjust rates quarterly with a 3-6 month lag behind equipment price changes. Q2 2026 rental rates still reflect pre-tariff equipment costs, making short-term rental unusually competitive against purchase for projects under 12 months.