On August 1, 2025, a new 15% tariff on industrial machinery and equipment imported from the Eurozone will take effect in the United States. While trade disputes and tariffs are nothing new, this move is set to have an immediate and significant impact on insured property values – especially for industries that depend on high-value, specialized equipment sourced from Europe.
For facility owners, insurers, and brokers alike, the concern is clear: many insured assets – particularly machinery – will now be under-insured unless values are promptly reassessed to reflect these sudden cost increases.
European Equipment: A Backbone Across Industries
The Eurozone is a dominant supplier of highly specialized machinery across a broad range of sectors in the U.S. market. This includes:
- Packaging equipment from Germany, Italy, and Spain – used extensively in food, beverage, consumer goods, and industrial sectors.
- Diagnostic imaging and medical systems, such as MRI and CT scanners, manufactured by companies like Siemens (Germany) and Philips (Netherlands).
- Pharmaceutical manufacturing equipment, including tablet presses, blister packaging systems, sterile filling lines, and bioprocessing equipment – much of which originates from Italy, Germany, and Austria.
These machines are not only expensive to purchase but often require custom configurations, specialized installation, and long lead times – all of which are now affected by this 15% tariff.
Replacement Cost Just Went Up – But Insured Values Haven’t
Insurance coverage for fixed assets is typically based on Replacement Cost New (RCN) – the cost to replace an item with a new one of similar kind and quality under current market conditions. With the introduction of the 15% tariff, the RCN for Eurozone-origin equipment has instantly increased, regardless of when it was originally purchased.
Here’s where the risk lies: unless insured values are updated, businesses are now at risk of being under-insured by at least 15% on a wide range of equipment categories.
Take, for example, a pharmaceutical facility with $10 million in packaging and sterile processing equipment sourced from Europe. With the new tariff in effect, replacing that same equipment will now cost $11.5 million – but unless the insurance values are updated, the facility is only covered for the original $10 million. That $1.5 million gap may become the owner’s responsibility in the event of a loss.
Industries at Particular Risk
While the tariff applies broadly to industrial equipment, certain sectors are more exposed than others due to their dependency on Eurozone manufacturers:
- Healthcare providers and diagnostic labs with imaging systems and lab automation tools from Europe
- Pharmaceutical producers with highly regulated, validated equipment sourced internationally
- Food, beverage, and consumer goods companies relying on Eurozone-origin packaging lines and robotics
- Specialty manufacturing sectors where domestic alternatives are limited or nonexistent
For these businesses, the risk of outdated insurance values is both real and immediate.
What Organizations Should Do Now
To avoid being caught under-insured, companies should:
- Review asset registers and insured values, with a focus on high-value imported machinery
- Identify equipment sourced from Eurozone suppliers, especially in regulated or highly specialized environments
- Engage a qualified insurance appraisal firm to update replacement costs, with consideration to the new tariffs, supply chain changes, and inflationary pressures
Why Work with Suncorp Valuations
At Suncorp Valuations, we provide expert insurance appraisal services tailored to a wide range of industries – from manufacturing and healthcare to logistics and pharmaceuticals. Our professionals have deep experience appraising globally sourced machinery, and we actively monitor how trade policy, tariffs, and market volatility affect insurable values. With over 60 years of valuation expertise and a global client base, Suncorp is ideally positioned to help organizations accurately assess replacement costs and ensure their insurance coverage remains aligned with today’s evolving cost realities.