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Pass the Section 232 cost through on every SKU, and you push contractors toward independent aftermarket. Absorb it, and you give back margin you cannot afford to lose in a market where new equipment sales have stalled, parts are carrying the P&L, and rental fleet operators are already comparing your prices to the will-fit alternative every quarter.
Your annual pricing cycle gives you no third answer.
The third answer lives inside the price waterfall. In August 2025, the U.S. Department of Commerce expanded Section 232 tariffs to 407 additional product categories, including mobile cranes, bulldozers, heavy equipment, compressors, and pumps, with the steel and aluminium content now subject to the 50% rate. Caterpillar raised its 2025 tariff cost estimate to USD 1.5 to 1.8 billion. CNH Industrial closed 2025 with construction-segment EBIT down roughly 60%, with about USD 43 million of incremental tariff and product cost hitting Q4 alone. Your numbers are smaller. The calculation is identical.
The price waterfall is the path a part takes from list to pocket. List, dealer discount, rental fleet term, customer rebate, off-invoice items, freight, returns. Each step is small. Each is invisible to the next one upstream. Most construction OEMs see two numbers, the top (list) and the bottom (gross margin at year-end). Everything between is dark.
Right now, that dark stretch is under unusual stress:
Four pressures, one waterfall. The construction OEMs that hold margin in 2026 are the ones that can actually see it.
You probably recognise at least three of these:
This is the part most internal initiatives underestimate. Multi-channel pricing is not a CRM problem first. It is an accountability problem made worse by structure. Your dealer team is rewarded for dealer satisfaction and list discipline. Your rental fleet account managers are paid on rental volume, which means matching the price-sensitive rate. Your direct contractor sales lead is measured on direct revenue, which competes with both. Three teams, three locally rational scoreboards, no shared accountability for the net price realised across all three channels on the same SKU. The leak survives because no role is paid to close it. Any tool or process that does not force that conversation across those three teams will be adopted, quietly worked around, and declared a partial success inside two review cycles.
A single SKU. A hydraulic pump. It sells across excavators, wheel loaders, dozers, and mobile cranes. Independent aftermarket competition on this class of part is intense. It moves through dealer, rental fleet, and direct contractor channels in different proportions. The same pattern shows up on undercarriage assemblies, hydraulic cylinders, filters, and wear plates, on any high-wear category where contractor downtime cost is high.
The list price below is an example value. The structure is what happens in real portfolios every day.
A third of the value disappears between list and pocket. Roughly ten to twelve percentage points of that is recoverable: the rental fleet adjustment applied without modelling competitive alternatives, the flat rebate on a part the contractor would not have substituted, the off-invoice items nobody tracks at the SKU level.
One percent on this single SKU is roughly USD 25 per unit. Across an active portfolio of 50,000 to 200,000 SKUs sold thousands of times a year, the recoverable margin stops being interesting in dollars and starts being interesting in tens of millions.
Whatever you build or buy, three capabilities have to work together. Any one of them in isolation will not move pocket margin.
Without those three working together, pricing in construction is one quarter of tariff escalation away from carrying losses the new equipment side cannot offset.
MP ONE™ is one answer to this. Whatever platform you put behind it, the shift in day-to-day pricing work looks the same:
That is the shift. One way to deliver it, and the way MP ONE does, is by unifying three capabilities most construction OEMs currently have scattered across systems and teams. The Intelligence Engine watches the market continuously. The Decision Engine applies pricing logic at the SKU and channel level. The Performance Engine tracks what actually realises in pocket. One platform, one waterfall, one source of truth.
You do not have another full pricing cycle to figure this out. Section 232 is not pausing. Independent aftermarket competition is not waiting. The rental fleet operator on the phone next quarter is not getting more patient.
Every quarter your competitor runs on a continuous waterfall with channel-specific logic and you run on an annual one with a uniform discount tree, they take margin you did not know you had.
The construction OEMs that survive Section 232 with their margin intact will have done one thing in common: they will have killed the assumption that dealer, rental fleet, and direct contractor is one pricing decision. It is three. The equipment is the same. The competitive context is not. The OEMs that treat 2026 as another round of uniform list updates will spend the second half of the decade explaining to their boards why the same SKU leaked margin differently in every channel.