The Supreme Court killed IEEPA tariffs, but Section 232 duties on steel, aluminum and potentially robotics are still hammering the equipment your clients actually finance.
Bottom line up front: On February 20, 2026, the Supreme Court ruled 6–3 that IEEPA does not authorize the president to impose tariffs. Within hours, the White House announced replacement tariffs under Section 122 at 10–15%, which expire in late July absent Congressional extension. Most equipment finance brokers heard “tariffs struck down” and assumed the cost pressure was easing. It isn’t. The Section 232 tariffs on steel and aluminum — the duties that directly inflate the price of construction equipment, manufacturing machinery, trucks, trailers and heavy industrial assets — were untouched by the ruling. A new Section 232 investigation into robotics and industrial machinery could add an entirely new tariff layer on the core assets in your deal pipeline. Every deal conversation now requires a tariff impact analysis, and the brokers who build that into their process will close deals that competitors are losing to borrower indecision.
What the Supreme Court actually changed — and what it didn’t
The distinction matters enormously for equipment finance. The IEEPA tariffs were broad-based, country-specific duties — the “Liberation Day” reciprocal tariffs, the fentanyl-related tariffs on China, Canada and Mexico. These affected a wide range of imported goods, and their elimination provides genuine relief for some sectors. Importers who paid these duties may eventually receive refunds, though the process remains contested in court.
But the Section 232 tariffs — 25% on steel, 10–25% on aluminum — operate under entirely different legal authority and were completely unaffected by the ruling. These are the tariffs that hit equipment finance hardest because they directly increase the manufacturing cost of the assets your clients finance: excavators, loaders, forklifts, trailers, HVAC systems, commercial kitchen equipment and virtually anything with a significant steel or aluminum component. The Association of Equipment Manufacturers reported that U.S. equipment manufacturers employing 2.2 million workers face increasing pressure from these duties, and that pressure hasn’t changed.
The Section 122 replacement creates a countdown clock
President Trump’s executive order imposing replacement tariffs under Section 122 of the Trade Act of 1974 adds another layer of complexity. These tariffs started at 10% and were raised to the statutory maximum of 15% within a day. By law, they expire after 150 days unless Congress extends them, placing the deadline in late July 2026. The administration has signaled it may try to extend the tariffs beyond the 150-day limit, creating legal uncertainty that could persist through the second half of the year.
For equipment finance brokers, this creates a unique sales environment. Borrowers who need equipment now face a choice: finance at current pricing, which includes Section 232 duties plus the Section 122 surcharge, or wait and hope that costs decline after July. But waiting carries its own risks — demand for equipment is strong, lead times are already stretched in some categories and the 100% capital expensing provision means the tax benefit of buying in 2026 is real and immediate. The broker who can quantify both sides of that equation — the cost of acting now versus the cost of delay — is the one who closes.
The robotics investigation could change everything
A pending Section 232 investigation into robotics and industrial machinery has the potential to deliver an entirely new tariff layer on assets that are increasingly central to equipment finance portfolios. As automation investment accelerates — driven by labor scarcity and the productivity imperative — more borrowers are financing robotic welding systems, automated material handling, CNC equipment and packaging automation. If these categories attract Section 232 duties, the cost of automation equipment could jump materially, affecting both demand and residual value assumptions.
For brokers and direct lenders, this isn’t a distant hypothetical. The investigation is underway, and its outcome could reshape the economics of deals already in your pipeline. Lenders are already selectively tightening credit standards and reassessing residual value assumptions on a more frequent basis in volatile sectors like trucking and manufacturing. Vendor finance partners are leaning into fair market value leases, deferred payment structures and subsidy programs to help equipment buyers navigate cost uncertainty. Brokers who understand these structural tools have an advantage over those who are still selling on rate alone.
The ELFA Foundation agrees: trade policy is the top risk factor
The Equipment Leasing & Finance Foundation’s 2026 Economic Outlook identifies trade policy as the factor most likely to drive the macroeconomic narrative during the first half of the year. The Kansas City Fed’s Small Business Lending Survey found that lender respondents, on net, rated trade policy as the single most impactful factor on small business lending over the next 12 months, ahead of interest rates and inflation. Eighty-three percent of respondents who tightened credit standards cited a less favorable or more uncertain economic outlook as a key reason.
This isn’t just a macro risk that lenders think about. It’s a deal-level reality that brokers need to address in every client conversation. When a contractor is quoted $185,000 for a piece of equipment that was $155,000 eighteen months ago, and part of that increase is directly attributable to steel tariffs, the broker needs to be able to explain why — and to structure the deal in a way that accounts for the elevated cost without killing the borrower’s cash flow.
Tariff fluency is the new competitive edge
Most equipment finance brokers are not having tariff conversations with their clients. They’re not explaining the difference between the tariffs that were struck down and the ones that remain. They’re not modeling the potential impact of the Section 122 expiration in July. They’re not discussing whether a fair market value lease makes more sense than a $1 buyout when residual value assumptions are unstable. That gap in the conversation is costing them deals — because the borrower’s uncertainty doesn’t go away just because the broker doesn’t address it. It just delays the decision until someone else does.
Action plan
- Build a tariff cheat sheet for your top five asset categories. For each equipment type you regularly finance — construction, transportation, manufacturing, medical, food service — document which tariffs apply (Section 232, Section 122, or both), what the current duty rates are, and when they expire. Update it monthly. This becomes the foundation of your client conversations.
- Restructure deal presentations around total landed cost. Instead of leading with rate and term, start with the equipment’s current price, the tariff component embedded in that price, and what happens to pricing under different tariff scenarios. Show the borrower the cost of waiting versus the cost of financing now with 100% capital expensing.
- Default to FMV leases in tariff-volatile asset classes. When residual value assumptions are unstable — and they are unstable in anything with heavy steel or aluminum content — a fair market value lease protects both the borrower and the lender. It also gives the borrower the lowest monthly payment, which matters when the equipment’s sticker price is inflated by duties.
- Offer deferred payment structures on deals closing before July. For borrowers who need equipment now but are anxious about the Section 122 expiration, deferred payment structures let them lock in the asset while pushing payments out 60–90 days. This addresses the timing anxiety without losing the deal.
- Monitor the Section 232 robotics investigation. If you’re financing automation equipment — robotic systems, CNC machines, automated material handling — watch this closely. If new duties are announced, deals currently in pipeline at pre-tariff pricing will need to be re-quoted. Having the conversation with your lender partners now about how they’ll handle mid-deal pricing changes saves you from losing approved deals.
