John Deere and other American farm equipment manufacturers will be hoping to avoid a decline in profits this year as they try to absorb the impact of tariffs in tandem with slower business due to crop prices.
The company, which is the leading supplier of farm equipment in the United States, is in a worse financial position now than it was a year ago. In its Q3 earnings report, John Deere said its net income was down 26 percent compared to the same time last year. It also saw a 9 percent decline in sales.
That, in part, is due to President Donald Trump’s tariffs.
Tariffs on steel and aluminum have made it more expensive to manufacture equipment, even though John Deere assembles 80 percent of its equipment in the U.S., and only 25 percent of its components are imported, the company reported.
“Tariff costs in the quarter were approximately $200 million, which brings us to roughly $300 million in tariff expense year to date,” Josh Beal, the director of investor relations, told the Wall Street Journal in August.
The company expects another $300 million in tariff costs by the end of the year.
When asked for comment by The Independent about potential challenges for the company caused by Trump’s tariffs, John Deere referred to its Q3 earnings report and the fact that it purchases most parts and assembles equipment in the U.S.
But the classic American company, with its signature green and yellow logo splashed across tractors and other equipment, is the exact type of company Trump’s tariffs supposedly aim to help by bolstering domestic manufacturing and encouraging farmers to purchase American-made goods.
John Deere says it plans to invest more than $20 billion in America over the next decade. It currently has over 60 facilities in the U.S. and employs more than 30,000 people with 450 of those being U.S. veterans.
But Trump’s intention only works when farmers are purchasing new farm equipment – and right now, they’re not.
Farmers tend to purchase new equipment when profits are high, which typically coincides with higher crop prices. But right now crop prices are in decline
Trump’s tariffs also appear to be hurting the crop market.
Between January and April of 2025, the U.S. had a $19.7 billion agricultural trade deficit because it imported much more than it exported, Farm Bureau, a trade publication, said.
Retaliatory tariffs from other countries against the U.S. have made American crops, which typically cost more due to high labor costs, less desirable to purchase.
Take China, for example. In the first half of the year, the U.S.’s agricultural exports to China declined by more than 50 percent compared to the same time last year.
The slow crop market has pushed American farmers to utilize the same old tractors they own, buy used tractors, or even rent machinery according to the New York Times.
“How can companies and farmers plan for the long term when you don’t know what the cost of your inputs will be or what your market will look like in the weeks to come?” Tad DeHaven, a policy scholar at the Cato Institute, told the New York Times.
“These businesses, whether John Deere or a craft brewery or anything in between, are trying to navigate this. They are trying to do the best they can to cut costs and to hang in there,” DeHaven added.
