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In the United States, tariffs are adding costs and uncertainty for farm-equipment manufacturers, which could put pressure on buyer prices. But they are not the only—or clearly the main—reason equipment sales have weakened: lower farm incomes and grain prices, higher borrowing costs, and other elevated costs are also weighing on demand. Since June 8, 2026, covered agricultural equipment classified as metal-derivative products has faced a temporarily reduced 15% additional Section 232 duty; that is not a universal total tariff on every imported tractor, combine, or part.
What tariff applies to farm equipment?
The current U.S. policy depends on the particular product. A June 1, 2026 presidential proclamation included agricultural equipment among derivative products subject to a temporarily reduced 15% additional ad valorem duty under Section 232. The change applies to covered goods entered for consumption or withdrawn from warehouse on or after June 8, 2026. The proclamation’s 15% is an additional duty for covered products, not a statement of the total duty on every machine.
Classification, product coverage, country of origin, and other applicable trade rules can change the result. The proclamation also defines an “entirely” U.S.-metal product using an 85% threshold: U.S.-smelted or cast aluminum and copper, and U.S.-melted and poured steel, must account for at least 85% of the weight of those metals in the product to meet that definition. Do not assume a machine qualifies or calculate its total duty from this general description alone. The White House proclamation sets out the policy and coverage details.
For a specific tractor, implement, or part, start with its current Harmonized Tariff Schedule classification and applicable measures. The USITC’s tariff information page provides an HTS lookup; its 2026 HTS Revision 20 was published September 28, 2026. USITC tariff information is a starting point, not a substitute for item-specific classification and review of the rules that apply to the product and its origin.
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Are tariffs why farm equipment sales are falling?
No single cause is established by the available market data. University of Illinois farmdoc daily reported preliminary U.S. farm tractor sales of 195,857 units in 2025, down 9.86%, and combine sales of 3,579 units, down 35.58%. Those are preliminary annual sales figures, not a tariff-only estimate.
Other indicators point to broad demand pressure. The Creighton Farm Equipment Sales Index, a survey indicator covering ten states and measured on a 0–100 scale with 50 neutral, had remained below neutral since October 2023 and stood at 16.7 in February 2026. That regional index is not a national census. The farmdoc analysis describes lower grain prices and farm incomes, higher borrowing costs, and higher input costs as factors weighing on purchases. It also reports that manufacturers scaled back production to bring dealer inventories into line with cooling demand; that does not establish tariffs as the sole cause of production adjustments. The February 27, 2026 farmdoc analysis discusses these sales and market indicators.
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How could tariffs affect manufacturers and buyers?
Manufacturers may absorb costs or change sourcing
Duties on imported metals, parts, or covered equipment can raise costs. Manufacturers may absorb some of that expense, seek different suppliers, alter sourcing or production, or try to raise prices. Which response they choose depends on the product and business; the reported company figures show exposure but do not isolate the effect of each tariff measure on overall results.
Higher costs could reach equipment prices, but pass-through is not quantified
Tariff-related cost increases may contribute to higher prices for farmers, but the cited sources do not measure how much was passed through to dealer or retail prices. The farmer-paid machinery price index rose 0.8% year over year in December 2025, according to farmdoc’s reporting of USDA NASS data. That index movement does not establish that tariffs caused a particular price increase. Price growth can moderate while prices remain elevated.
Purchase decisions depend on farm finances and credit
A more expensive machine is harder to justify when farm revenue is under pressure or financing costs are high. Tariffs can add to that calculation, but the sales declines occurred alongside broader farm-income, crop-price, credit, and input-cost pressures. The available evidence cannot assign a share of the decline to tariffs alone.
What manufacturers have reported about tariff costs
The following figures were reported by University of Illinois farmdoc daily on February 27, 2026. They describe company-specific reported or expected costs and results; they do not show how much was passed on to equipment buyers.
| Company or measure | Reported figure | What it means |
|---|---|---|
| Deere | Approximately $600 million in tariff costs in fiscal 2025; roughly $1.2 billion projected for fiscal 2026 | The fiscal 2026 amount is a forecast, not a realized total. |
| CNH Industrial agricultural business | Adjusted EBIT of $1.47 billion in 2024 and $772 million in 2025 | Farmdoc says tariff costs contributed to the decline; the figures do not establish tariffs as its only cause. |
| AGCO | $40 million in tariff costs in 2025; up to $110 million expected in 2026 | The 2026 amount is an expectation, not a realized total. |
These figures are secondary reporting of company filings or calls by farmdoc, rather than a measure of tariff effects across the industry. The farmdoc analysis provides the company context.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What to check when evaluating a particular machine
A general tariff headline is not enough to determine the cost of a specific import. For a machine or part, the relevant checks include:
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- Product classification: Identify the current HTS classification for the exact item.
- Coverage: Confirm whether it is included as agricultural equipment or another covered derivative product.
- Origin and trade rules: Check the country of origin and any applicable trade agreement or other measure.
- Metal content: If relevant, determine whether the proclamation’s U.S.-metal threshold applies.
- Costs beyond the tariff: Separate a manufacturer’s cost exposure from any price change actually charged to buyers.
- Market conditions: Consider farm income, crop prices, credit costs, and dealer inventories alongside tariff policy.
Tariffs are one pressure, not a complete market explanation
U.S. farm-equipment makers have reported or forecast substantial tariff-cost exposure, and tariffs may contribute to buyer-price pressure. Yet weaker sales and production adjustments also reflect difficult farm economics and cooling demand, while the available evidence does not quantify tariff pass-through to retail prices or isolate tariffs’ share of the sales downturn. The June 2026 rate change eases one cost channel for covered products; it does not remove the need to check a specific item’s classification and applicable duties.
The FTC and USDA have separately opened a public inquiry into agricultural equipment manufacturing and distribution practices, with comments due December 7, 2026. The agencies identify potential effects on pricing, market entry, innovation, and farmer welfare; this inquiry is relevant market context, not a measurement of tariff impacts. The FTC and USDA announcement gives details.
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