The “Great Equipment Squeeze” is reshaping the outlook for US manufacturers — particularly in construction, agriculture, and industrial machinery — as steep tariffs under Donald Trump’s 2025 trade regime send costs soaring and supply chains into turmoil.

On 7 August, Washington imposed fresh tariffs on 69 trading partners, with rates ranging from 10% to 39%. Canada was hit with 35%, India 25%, Taiwan 20%, and Switzerland 39%. The European Union, Japan, and South Korea negotiated a reduced rate of 15% on key exports such as automobiles, though those concessions remain provisional and could revert to a 25% levy.

The scale of the tariffs has revived fears of a new era of global trade friction. US manufacturers are already reporting component cost increases of 18–26%, while factory expenses could rise by up to 4.5% — straining cash flow, delaying investments, and raising the risk of layoffs or plant closures. Projects in infrastructure and housing are also seeing delays as procurement teams scramble to secure alternatives.

Against this backdrop, many US companies are holding onto leased equipment for longer than planned, delaying replacements and exacerbating shortages of available machinery across sectors.

In this Q&A, Dennis Bolton, Senior Managing Director and Head of North America Equipment Finance at US-based consultants Gordon Brothers, speaks with Leasing Life Editor, Alejandro Gonzalez, about what’s driving the squeeze, how companies are adapting, and what the global knock-on effects may mean for Europe.

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Q&A

Alejandro Gonzalez (AG): What kinds of behaviours are you seeing from companies in the US as they respond to rising equipment costs and supply constraints, and how has this shifted traditional leasing and replacement cycles? 

Dennis Bolton (DB): The market is full of unknowns with respect to tariff impacts making decision-making and operating a business difficult. We know it’s a matter of time before tariff impacts come into better focus. In the interim, with more clarity in sight, we will see companies start making better decisions with respect to managing their equipment and operational needs.

AG: What are the hidden risks of holding onto leased or owned equipment longer than planned, from both a financial and operational standpoint? 

DB: Equipment values are subject to market and economic forces and will vacillate on supply & demand changes and external factors such as tariffs. The risk here is that business buy used equipment at tariff impacted levels and the tariffs are resolved for the better or worse. Companies will either recognize a benefit or impairment depending on what happens. It’s anyone’s guess right now.

AG: With fewer assets returning to market, how is the resale and redeployment landscape evolving, and is the sector entering a seller’s market for used equipment? 

DB: I don’t think we’re in a seller’s market just yet. A lot depends on the industry, so some are seeing supply tightening and others have yet to really see an impact.

AG: Which sectors or asset classes are seeing the most acute shortages or pricing pressure in the used equipment market? 

DB: Any industry where the prime equipment is foreign built (or is assembled using imported components) is or will be impacted. The other consideration is the operator’s economic outlook and whether the equipment is for expansion or replacement.

AG: Are there new financing or secondary-market strategies emerging to help businesses navigate this squeeze more creatively? 

DB: Operating leases arguably provide the best hedge, depending on how the lessor accounts for any tariff-related premium.

AG: How are these US-driven dynamics — particularly the equipment shortages and surging used values — starting to affect European markets and cross-border asset flows? 

DB: I haven’t seen a significant impact, but believe many of the scenarios are similar when retaliatory tariffs are considered.