Tariffs are likely to harm the equipment finance industry, as they will significantly increase costs, and even domestically produced goods may experience price increases. Higher equipment prices could lead more end-users to explore financing options, and other policies pursued by the administration (e.g., lighter touch regulation) may offset some of the negative impacts. On balance, however, the impact is likely to be negative, as the tariff issue has coincided with a sharp increase in economic uncertainty, which often results in firms delaying major investment decisions until the outlook becomes clearer. The new tariff regime is likely to result in slower economic growth and a weaker environment for equipment and software investment for the remainder of the year.
