How Will Tariffs Impact Farm Equipment Markets?

As the Trump administration moves forward with sweeping global tariffs, uncertainty is causing concern among dealers and manufacturers about the impact to the agricultural equipment industry. This could include hesitancy among farmers to invest in new machinery, rising demand and prices for used equipment, and some manufacturers pausing on capital investments while others move forward or expand existing plans. 

Concern Among Equipment Dealers

Agricultural equipment dealers report they are “concerned, but not yet alarmed,” according to a recent study by Tractor Zoom. Of the 25 dealers surveyed, 45% said they believe tariffs will have a negative effect and another 45% are unsure. 

Nearly 40% of dealers surveyed responded with a 4 out of 5 when asked: “How concerned are you about the impact of new tariffs on your dealership?” This level of concern remained consistent across dealership roles from sales to ownership. 

General uncertainty seems to be the driving force behind this rating, with dealers noting farmers seem hesitant to make large financial decisions when they aren’t clear on future policy decisions. 

One survey respondent said, “Uncertainty about tariffs has been the biggest threat. Many customers are taking a more cautious approach to buying new and used equipment because they just don’t know what will happen.” 

Potential Increased Demand, Prices for Used Equipment

In the Tractor Zoom survey, more than half of the respondents said they believe the tariffs will result in increased demand for used equipment. Others said they believe equipment spending will flatten out, as some producers have recently upgraded and will likely hold off on any further spending for some time. 

“A general state of uncertainty will in turn dissuade producers from spending any money on equipment,” said one respondent. “Many producers have already upgraded in the past year or two since used equipment pricing was down, so those folks can just sit and ride this out without needing to upgrade or replace anything at present.”

Survey respondents also noted prices for used equipment will likely rise as a direct result of tariffs, due to increased cost pressures and elevated buyer interest. 

Manufacturer Approach Mixed

In a session held at Commodity Classic in early March 2025, just prior to the first round of announced tariffs, AEM noted that tariffs would have a negative impact on the agricultural industry, citing data from past rounds of tariffs imposed by other administrations. 

“(AEM) member company CEOs tell us they are delaying capital investments, delaying hiring, and putting off [research and development] because of the uncertainty,” said Kip Eideberg, senior vice president of government and industry relations for AEM. “Operating in an environment where you don’t know day-to-day, week-to-week, month-to-month whether you’ll be paying 25% more, 40% more, 60% more. The steel content in the piece of equipment is tariffed at a different rate than the engine. That uncertainty is devastating for anyone looking to make investments.

“There really is no silver lining at all with tariffs, certainly for machinery manufacturers,” Eideberg added.

After the tariff announcement on April 2, Eideberg put out a statement that equipment manufacturers appreciate the Trump administration’s commitment to American manufacturing. “While we agree that the key to a strong U.S. economy is building more products in America, we need certainty in the trade environment to make investments in domestic manufacturing,” he said. “We are concerned that reciprocal tariffs on our trading partners will hurt our industry and our customers. Tariffs are just one tool at the administration’s disposal. Equipment manufacturers look forward to an ongoing dialogue with the White House to explore all avenues to provide greater economic opportunity for Americans and ensure that the U.S. remains the undisputed leader in the global economy.”

Some manufacturers are taking proactive steps to combat potential tariff impacts. UK-based JCB announced plans to double the size of a new factory under construction in San Antonio. The original plan for a 500,000-square-foot factory has been revised to 1 million square feet, and is due to start production next year. JCB has been manufacturing in Savannah, Georgia, for 50 years.

“The U.S. is the largest market for construction equipment in the world and President Trump has galvanized us into evaluation how we can make even more products in the USA, which has been an important market for JCB since we sold our first machine there in 1964,” said Anthony Bamford, JCB chairman.

Other manufacturers are taking a pause to evaluate the impact of tariffs. On April 1, CNH Industrial issued the following statement: “In North America, we are stopping shipments from North American plants and European imports, effective today. This is a temporary move until we assess the full impact of planned tariffs on pricing. There are no impacts to production and parts shipments continue as planned. We will continue to monitor the situation.”

Manufacturer Outlook 

At Commodity Classic, leadership from AGCO and Case IH shared their thoughts on the year ahead.

“We’re essentially in the trough, but it’s always better to be seeing the bottom and working your way back up than looking down at a downhill trajectory,” said Eric Hansotia, AGCO CEO. “Although that doesn’t feel good for our farmers, we recognize the pressure they’re under and our whole intent is to solve problems for them. Once you’re at the bottom, there’s only one way to go and that’s up.” 

Kurt Coffey, Case IH vice president of North America, said the challenge for farmers making large investment decisions right now is a lack of stability. 

“If you’re going to allocate large amounts of capital to an investment, you need a return,” he said. “And to do that, you need to know at what point it makes sense, and to do that requires assumptions and stability. Right now we have such instability and the trade picture is extremely complicated, and that is causing challenges in the market today. People are hurrying up and waiting.”