Tariffs’ Toll on Equipment, Capital Projects
Key Takeaways
- Uncertainty from fluctuating tariffs and geopolitical issues has led many companies to consider dual sourcing and even relocating manufacturing facilities.
- Many companies are extending equipment lifespans and investing in reliability and refurbishment to mitigate unpredictable replacement costs.
- The global supply chain for parts, especially stainless steel, copper and aluminum, has been heavily impacted, increasing costs even for domestically sourced components.
Regardless of whether food and beverage companies have seen impacts from tariffs on their product lines, they certainly have had an impact where equipment and machinery are concerned. Processors have seen higher prices, delays and sourcing challenges when it comes to outfitting their facilities with new equipment, and they responded in 2025 by trying to wait out the tariffs, at least according to research from PMMI (www.pmmi.org).
“The first three quarters [of 2025] were relatively slow; then in the fourth quarter, a significant number of projects moved ahead before the end of the year,” explains Jorge Izquierdo, vice president of market development for PMMI. “Still, about half of our members say they have projects on hold because of tariffs.”
More projects were on hold at the beginning of 2025 Q4 (65%) than are on hold now, he says, but with half of the respondents still holding off on projects, it’s clear that processors remain wary of the additional costs. Bruce Wesner, managing principal and general manufacturing vertical leader at Life Cycle Engineering (www.lce.com), saw processors often scrambling to respond to all the variance in tariffs and news about them.
“Every tariff announcement triggers corporations to rush to lock in purchases before effective dates, then a hard stop when pricing becomes too unpredictable to justify the capital project,” he says. Izquierdo confirms similar sentiments among PMMI member companies, saying that the uncertainty and inconsistency are the biggest hurdles.
Read how one food processor sought help and got his tariff refund at "How To File for a Tariff Refund."
"One day it's one type of tariff, another day it's something different; one day it impacts parts from Europe, another day parts from Asia,” he explains. “The majority of our members are looking at dual sourcing, and some are considering relocating manufacturing — but considering, not yet implementing.”
Meanwhile, some processors have responded to the uncertainty by changing their approach to expected lifespan of equipment, Wesner says.
“We're seeing more clients extend asset life and put money into reliability and refurbishment instead, [because] maintaining what you have has become more predictable than replacing it,” he adds. But there are long-term concerns about taking that approach, however, as a decision to stretch equipment lifespan too much could solve a problem today but cause unplanned downtime two or three years from now.
Despite all this, the demand to invest in capital improvement appears to be solid, according to PMMI’s survey. Izquierdo says quotations for projects have remained consistently high from all of last year through the first quarter of 2026, but actual orders have been relatively weak overall.
“The main reason is uncertainty — tariffs are part of the equation, but then you have problems in the Middle East, war-related disruptions, increased ingredient costs, packaging material costs tied to oil prices, and taxes on aluminum and steel,” he concludes. “It's hitting companies from all different directions.”
Parts procurement problems
It’s no secret that food processing’s stainless steel-intensive machines are often sourced from companies outside the U.S., with controls and automation bound to a global supply chain. That has created a bit of a double whammy when it comes to the tariffs implemented over the last 18 months, Izquierdo says. Close to 90% of respondents to PMMI’s survey said the No. 1 way tariffs impacted their businesses was through the increased cost of procurement of imported parts.
“Processing and packaging equipment is like everything else: You buy a Jeep and the transmission comes from Italy, the engine comes from somewhere else, and it's assembled elsewhere and shipped to the U.S.,” he says. “We’re certainly part of a global economy.”
As such, it isn’t as simple as shifting to source parts from U.S. suppliers, Wesner notes: “Domestic sourcing sounds simple, until you’re actually trying to spec a replacement part.”
Indeed, PMMI’s survey highlighted struggles with domestic procurement of parts as well, according to Izquierdo. “More than half of our members are expressing that it's not just imported parts. Imported parts have increased in price, but local parts are also increasing their prices.”
Replacement parts saw significant challenges, too, since machinery already installed did not stop running and thus did not stop needing maintenance and repair. Wesner explains that the additional costs brought on by tariffs on raw materials needed for these parts stack up faster than most teams often anticipate.
“Steel, aluminum and copper tariffs hit almost every piece of equipment in a food plant: stainless fabrication, conveyors, tanks, packaging lines, pumps, valves,” he says. “Copper is the one that consistently surprises processors: By the time they account for motors, drives, electrical infrastructure and automation systems in a modernization project, the exposure is much larger than the initial estimate.”
The tariffs on these raw materials impact cost early in the process and are typically passed on to the processor in the price of the equipment, Wesner says, so “even when the finished equipment clears customs without facing a direct tariff, the OEM's internal supply chain costs have already risen significantly, and the processors often feel the impact regardless.”
About the Author
Andy Hanacek
Senior Editor
Andy Hanacek has covered meat, poultry, bakery and snack foods as a B2B editor for nearly 20 years, and has toured hundreds of processing plants and food companies, sharing stories of innovation and technological advancement throughout the food supply chain. In 2018, he won a Folio:Eddie Award for his unique "From the Editor's Desk" video blogs, and he has brought home additional awards from Folio and ASBPE over the years. In addition, Hanacek led the Meat Industry Hall of Fame for several years and was vice president of communications for We R Food Safety, a food safety software and consulting company.