Want more news about agriculture and the environment? Sign up for the Harvest newsletter for our latest reporting, plus behind-the-scenes exclusives.
Experts say prices on farm equipment are expected to rise, even after the Trump administration lowered tariffs in June.
Tariffs on equipment made from steel, aluminum and copper decreased from 25% to 15% on June 8 after President Trump signed a proclamation. Yet experts say the decrease isn’t enough to relieve manufacturers or farmers in a struggling market.
“We appreciate the [a]dministration’s move to lower tariffs on agricultural equipment, but the real-world savings are limited,” said Richard Gupton, the senior vice president of public policy and council for the Agricultural Retailers Association.
Gupton said the proclamation also states that tariffs will now be applied to the full value of farm equipment, not just the steel components.
“Until this issue is addressed, ag retailers face a difficult choice,” Gupton said. “Delay equipment purchases or absorb costs they cannot pass on to farmers already under financial pressure.”
Plus, Gupton said any imported steel parts used in American-built equipment are still subject to tariffs — increasing costs for manufacturers.
Brett Davis, the CEO of North American Equipment Dealers Association, said manufacturers have already been absorbing extra costs from tariffs over the past year. Now, he said many companies can’t afford to do that any longer.
“They can only eat so much,” said Davis. “They're for-profit businesses and they have to pass that pricing on to the customer. There's just no way around that.”
Davis said many U.S. manufacturers source parts from other countries, which would also face tariffs.
“So it could raise the price, even though it's being built here by American workers,” Davis said. “It's like there's no winning here, but there's a lot to be fleshed out yet.”
Davis said he doesn’t expect farm equipment sales to increase over the next year, although tariff policy could change.
“Farmers might buy less because the cost has gone up,” Davis said.
Farm equipment sales slide
Data from the Association of Equipment Manufacturers shows that there was more than a 20% drop in tractor sales in May compared to last year and more than 55% decrease in combine sales.
Bob Thompson, the president of the Michigan Farmers Union, said farmers in his area haven’t been buying new equipment for years.
“Any lowering of the tariffs is welcome news,” Thompson said. “But it doesn't bring much relief to the members of the Michigan Farmers Union from the standpoint that many of us are using second-hand equipment.”
Thompson, a fourth-generation soybean farmer, said input prices haven’t been this high in years.
The war in Iran has caused massive shipping delays and shortages for fuel and fertilizer, causing prices to spike. Farmers across the country have been feeling the added financial pressure.
“The farm economy typically runs on consistency and stability, and we don't have that,” Thompson said. “The trade wars on top of the tariffs have created such an uncertainty and an instability that it's very difficult.”
In the tariff proclamation, President Trump addressed the struggling market.
“Recent circumstances have affected and are affecting domestic industries that use agricultural equipment, industrial equipment and machinery, and other related products,” Trump stated.
The president said he was lowering tariffs on products like farm and construction equipment because they serve important roles in the economy.
“American farmers use agricultural equipment to produce the food upon which our Nation relies; construction equipment is essential for the continued reindustrialization of our Nation; and material-handling equipment enables industrial logistics and factory operations,” Trump stated in the proclamation.
Chad Hart, an agricultural economist at Iowa State University, said farm manufacturing has been facing headwinds for years. John Deere, for instance, has laid off thousands of employees in recent years.
“The tariffs sort of exacerbated a problem that was already happening within the ag machinery space,” Hart said. “They didn't create it.”
He doesn’t expect sales on farm equipment to change much in the coming year, especially given the farm economy.
“When farm incomes are strong and growing, we tend to see robust sales when it comes to agricultural machinery,” Hart said. “When those incomes drop, we tend to see farmers hunker down and work with the equipment that they have.”
This story was produced in partnership with Harvest Public Media, a collaboration of public media newsrooms in the Midwest and Great Plains. It reports on food systems, agriculture and rural issues.