US Tariffs on Machinery & Equipment

What This Covers

The machinery and equipment surcharge covers industrial machines, pumps, valves, compressors, and mechanical equipment classified under HTS chapter 84. The base tariff rate for machinery averages a relatively low 2.5%, reflecting US policy of keeping capital equipment affordable to support domestic manufacturing. Section 301 tariffs of 25% on Chinese-origin machinery remain fully in effect after the Supreme Court ruling. All other machinery-exporting countries now face a uniform 10% Section 122 tariff (effective February 24, 2026, expiring ~July 24, 2026), replacing the variable IEEPA reciprocal rates.

Most Affected Countries

China remains the most burdened country, with the 25% Section 301 surcharge plus the 10% Section 122 tariff creating combined rates approaching 37.5% on the 2.5% base — still the highest tariff facing any major machinery exporter. Germany and Japan, as the other two major machinery-exporting nations, now face identical tariff treatment at the 10% Section 122 rate, eliminating the old IEEPA-driven differential that had created winners and losers among allied industrial economies. South Korea, Italy, and Taiwan also benefit from the uniform 10% rate, which is lower than the country-specific IEEPA rates most had faced.

How Surcharges Stack

Chinese machinery faces the 2.5% base rate plus the 25% Section 301 surcharge plus the 10% Section 122 tariff, for a combined rate of approximately 37.5%. A $100,000 CNC machine from Germany now faces the 2.5% base rate plus the 10% Section 122 tariff, totaling 12.5% or about $12,500 in duties — the same amount as an identical machine from Japan, South Korea, or any other non-China source. This uniformity is a significant change from the old IEEPA regime where a German machine and a Japanese machine faced very different reciprocal rates. USMCA-compliant machinery from Mexico and Canada enters duty-free, providing a clear cost incentive for North American sourcing. The Section 122 tariff expires around July 24, 2026, after which non-China machinery could revert to the low 2.5% base rate alone.

Sourcing Strategies

The uniform 10% Section 122 rate allows machinery buyers to choose between German, Japanese, Korean, and other suppliers based purely on technical capability, price, and service quality rather than tariff differentials. Chinese machinery still carries a significant tariff premium due to Section 301, so importers of Chinese equipment should evaluate whether comparable machines from Germany, Japan, or South Korea offer better total landed costs. USMCA sourcing from Mexico and Canada eliminates tariffs entirely for qualifying equipment and reduces lead times. With Section 122's temporary nature, companies making major capital equipment purchases should factor in the potential for lower tariffs after July 2026 when timing procurement decisions.