Darren Coppock says companies have largely absorbed higher costs tied to tariffs on ingredients used in pesticides and herbicides, but he warns that won’t last. “You’ve seen some projections already that show production costs are going to go up this year,” Coppock said, adding that tariff impacts are starting to “bleed all the way through into farm prices.”

He also says tariffs on lumber and steel are complicating efforts to expand domestic fertilizer production, citing elevated construction costs and a lack of predictability. Coppock told Brownfield that sudden tariff changes—and uncertainty about how high they will be or how long they’ll remain in place—make long-term investment decisions difficult when new plants require multi-year planning horizons.

Tariff concerns intensified over the weekend after President Trump threatened new 100% tariffs on Canadian products following Canada’s trade deal with China. Coppock noted that U.S. farmers rely on Canadian potash, a potassium based salt, and so far supplies and prices have remained relatively stable.

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Deere will lay off 238 employees across factories in Waterloo, Iowa, and Moline and East Moline, Illinois. The move follows weaker financial results and higher costs that have reshaped the company’s 2025 outlook.

Deere reported a 26% drop in net income alongside a 9% decline in sales so far this year. Management linked the downturn to softer commodity prices that have tempered producer purchases and to a sharp rise in tariff expenses.

“Tariff costs in the quarter were approximately $200 million, which brings us to roughly $300 million in tariff expense year to date,” said Josh Beal, Director of Investor Relations at Deere.

The company now expects tariff costs to reach $600 million in 2025, up from a prior forecast of $500 million. Those costs are part of a broader trade backdrop. Since April, the U.S. has imposed wide-ranging tariffs of 10%–50% on most imports, with higher rates for dozens of countries and industries. The average tariff rate is now estimated at 18.6%, the highest since 1933.

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For shortline farm equipment manufacturers, this means you’ll need to determine whether any of your imported products are affected and accurately report the steel and aluminum content value when submitting entry documents to U.S. Customs and Border Protection.

While there’s no one-size-fits-all solution, here’s a summary of what could help you, along with strategies and tips from Marc Schneider, a business advisor at the Center for Industrial Research and Service (CIRAS) at Iowa State University:

Mitigation Strategies

These approaches can help reduce the financial impact if your products are subject to the 50% tariff:

• Steel Valuation vs. Total Price
  The 50% tariff applies only to the steel content value within an imported product—not the total price. This may include the cost of steel components but exclude non-steel parts, processing, and overhead.
  • Work with suppliers to break out steel vs. non-steel costs on your invoices.
  • Request a certificate of steel content from suppliers if your products include mixed materials (e.g., 50% plastic, 50% steel).
• Duty Deferment
  To assist with cash flow management, consider using a bonded warehouse. Your goods remain legally “in transit” until they’re used, which can delay payment of the tariff — though it will still apply eventually.
• First Sale Pricing
  If you buy steel through a wholesaler, you may be able to declare the import value based on the original producer’s price rather than the reseller’s price. However, this requires transparency from middlemen, which can be challenging.

Avoidance Strategies

These options focus on reducing or avoiding the 50% tariff altogether:

• Source from Countries with Lower Tariffs
  Some countries currently face reduced rates:
  • United Kingdom: 25%
  • South Korea: Possibly 15% (not yet finalized)
  • European Union: Reduced rates are under negotiation
  • Canada & Mexico: Potential lower rates under USMCA rules
    Also consider the “melt and pour” requirement, which determines tariff eligibility based on where the steel was melted and poured, not just where it was finished.
• Source Domestically (0% tariff)
  Domestic steel may be more expensive upfront but could be cost-effective overall once tariffs, freight, and import fees are factored in. CIRAS offers a Total Cost of Ownership (TCO) model to help evaluate options.
• Re-Engineering Products
  In some cases, redesigning equipment to use less steel or alternative materials could help reduce exposure to tariffs, though feasibility depends on the application.

Industry Trends: The “Wait-and-See” Approach

Many manufacturers are holding off on major changes while waiting for:

• Trade negotiations with specific countries to conclude
• Ongoing court cases that could affect the federal government’s tariff authority (courts have upheld Section 232 tariffs, but challenges remain around measures based on the International Emergency Economic Powers Act (IEEPA)
• Adjustments in global production locations and trade flows

Key Recommendation

Because the rules are complex and the stakes are high, we strongly recommend working with a formal import expert:

• Licensed customs broker
• Freight forwarder
• International trade attorney

These experts can help you calculate the correct steel and aluminum values for your shipments and ensure compliance.

Disclaimer

CIRAS’s mission is to summarize what we are seeing in the industry, share best practices, and to help manufacturers navigate their way through some of these changes. We are NOT legal experts, international customs agents or political advisors so the members of FEMA should always seek professional legal or customs advice where needed.

FEMA Member Legal Benefits

This article was prepared with guidance from John Turlais, partner at Foley & Lardner LLP, who provided insight into the legal considerations surrounding Section 232 and IEEPA-based tariffs.

As part of your membership, FEMA members are eligible for a free, 60-minute confidential legal consultation with attorneys at Foley & Lardner LLP who specialize in dealer contract law. To schedule a consultation, contact Foley & Lardner at (414) 319-7303.

At a recent town hall at Cedar Ridge Distillery, community members discussed how tariff-driven uncertainty is hitting farmers and manufacturers. Soybean farmer Matthew Willimack described a “double-edged sword,” with tariffs raising input costs while also discouraging exports, particularly to China.

“Tariffs are money that we’re paying to the government, and we have to pass on to our customers in some cases,” Kinze Manufacturing VP of Supply Chain Management Richard Dix said. “In some cases, we absorb those directly as well, and it takes away from our bottom line.”

Cedar Ridge CEO Jeff Quint said they’ve halted international investments, especially as bourbon remains a frequent target for foreign tariffs.

Iowa State economist Chad Hart added that Iowa’s globally dependent economy is feeling the strain. Export costs remain murky, and there’s concern China may turn to other suppliers like Brazil. “It’s hard to manufacture profitability on a soybean acre today,” Willimack said.

Representatives from Senators Joni Ernst and Chuck Grassley’s offices attended the meeting to hear local concerns.

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The short-term relief will allow the appeals process to proceed, after the U.S. Court of International Trade on Wednesday barred most of the tariffs announced since Trump took office, ruling that he had overstepped his authority.

Since returning to the presidency in January, Trump has moved to reconfigure U.S. trade ties with the world while using levies to force foreign governments to the negotiating table.

But the stop-start tariff rollout, impacting both allies and adversaries, has roiled markets and snarled supply chains.

Prior to the decision from the U.S. Court of Appeals for the Federal Circuit, known as an administrative stay, the White House was given 10 days to halt affected tariffs.

The Trump administration called the ruling “blatantly wrong,” expressing confidence that the decision would be overturned on appeal.

White House spokeswoman Karoline Leavitt told reporters that the judges “brazenly abused their judicial power to usurp the authority of President Trump.”

Leavitt said the Supreme Court “must put an end” to the tariff challenge, while stressing that Trump had other legal means to impose levies.

A separate ruling by a federal district judge in the U.S. capital found some Trump levies unlawful as well, giving the administration 14 days to appeal.

‘Hiccups’
Kevin Hassett, director of the National Economic Council, told Fox Business that “hiccups” sparked by the decisions of “activist judges” would not affect talks with trading partners, adding that three deals are close to finalization.

Trump’s trade advisor Peter Navarro told reporters after the appellate stay that the administration had earlier received “plenty of phone calls from countries” who said they would continue to “negotiate in good faith,” without naming those nations.

Trump’s import levies are aimed partly at punishing economies that sell more to the United States than they buy.

The president has argued that trade deficits and the threat posed by drug smuggling constituted a “national emergency” that justified the widespread tariffs — a notion the Court of International Trade ruled against.

Trump unveiled sweeping duties on nearly all trading partners in April, at a baseline 10% — plus steeper levies on dozens of economies including China and the European Union, which have since been paused.

The U.S. trade court’s ruling quashed these blanket duties, along with those that Trump imposed on Canada, Mexico and China separately using emergency powers.

But it left intact 25% duties on imported autos, steel and aluminum.

Beijing — which was hit by additional 145% tariffs before they were temporarily reduced to make space for negotiations — reacted to the trade court decision by saying Washington should scrap the levies.

“China urges the United States to heed the rational voices from the international community and domestic stakeholders and fully cancel the wrongful unilateral tariff measures,” said commerce ministry spokeswoman He Yongqian.

Asian markets rallied May 29, U.S. indexes closed higher while Europe closed slightly down.

‘Extraordinary Threat’
The trade court was ruling in two separate cases — brought by businesses and a coalition of state governments — arguing that the president had violated Congress’s power of the purse.

The judges said the cases rested on whether the International Emergency Economic Powers Act of 1977 (IEEPA) delegates such powers to the president “in the form of authority to impose unlimited tariffs on goods from nearly every country in the world.”

The judges stated that any interpretation of the IEEPA that “delegates unlimited tariff authority is unconstitutional.”

Analysts at London-based research group Capital Economics said the case may end up with the Supreme Court, but would likely not mark the end of the tariff war.

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Trump revealed the news May 30 during a rally at the US Steel’s Irving Plant in West Mifflin, Pennsylvania. In a social media post later, he specified that the 50% levy goes into effect on Wednesday.

Trump was at the Irving Plant, part of Mon Valley Works, for the rally celebrating apparent investment promises by Japan’s Nippon Steel. He says the new tariff level would help ensure that the tentative “planned partnership” between Nippon and US Steel achieves success.

More broadly, Trump says he doubled the steel tariff to create a more impenetrable barrier to foreign steel competing against US domestic steel. He explains that the 25% tariff potentially could be overcome by some overseas exporters.

“At 50%, they can no longer get over the fence,” the president said.
One domestic steel association immediately lauded the move. The American Iron and Steel Institute issued a statement noting that Chinese steel production was 118 million tons last year, unfairly exceeding total North American volumes.

“Led by China, global steel overcapacity and production continues to grow, even as overall global steel demand is being impacted by the sharp downturn in the Chinese construction sector,” AISI president and chief executive Kevin Dempsey comments.

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On April 9, Trump instituted a 90-day pause on a slew of country-specific tariff rates subject to his reciprocal tariff policy, instead maintaining a 10% baseline rate for most trading partners.

Since then, the U.S. has outlined a trade deal with the United Kingdom and agreed to a 90-day tariff reduction for imports from China.

“But it’s not possible to meet the number of people that want to see us,” Trump said after indicating that his administration has received interest in negotiating from 150 countries.

The administration is instead focused on “18 important trading partners” and “probably another 20 strong relationships,” Bessent told CNN on Sunday.

“President Trump has put them on notice that if you do not negotiate in good faith, that you will ratchet back up to your April 2 level,” Bessent said. The U.S. may also consider “regional deals” to cover smaller trading relationships in areas like Central America and Africa, he added, although he did not provide further details on what such pacts would entail.

The current pause on the Trump administration’s country-specific reciprocal tariffs is set to expire July 9. The suspension has temporarily lowered duties Trump hiked on countries such as Vietnam (46%), India (26%) and Japan (24%).

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The Ag Economists’ Monthly Monitor reveals 83% of economists believe the U.S. can reduce reliance on China, albeit with difficulty.

“There’s always the opportunity to reduce reliance on another nation, but it will take time and could be painful,” one economist noted.

Some say tariffs leave farmers with no choice but to shift away from China, while others warn that ignoring comparative advantage will make the U.S. worse off. Conversely, 17% argue China is too critical a buyer to replace in the near term.

Agriculture in a Recession? The April Monitor suggests agriculture is in a recession, with 72% of economists agreeing. U.S. ag remains heavily reliant on China for key chemical imports, making full independence from China nearly impossible. Some experts argue reducing reliance on Chinese imports is misguided.

Opportunities Amid Uncertainty: Despite risks, 61% of economists believe the U.S. and China will renegotiate the Phase One trade deal, which once committed China to purchasing an additional $200 billion in U.S. ag products. Though the deal stalled after Trump’s election loss, China made record corn purchases in 2020. Since then, Brazil has overtaken the U.S. as the top corn exporter, capitalizing on shifting trade dynamics.

Winners and Losers: Brazil stands to gain the most from this trade turbulence (76% of economists). Other beneficiaries include China (12%), India (6%), and Ukraine (6%), while none expect the U.S. to come out ahead.
Potential winners within U.S. agriculture include specialty crop producers, livestock farmers seeking increased European market access, biofuels, and cotton producers suffering from trade instability.

Path Forward: The best strategy for U.S. agriculture is to negotiate lower global tariffs (47%) or build domestic demand for ag products (32%). Restoring American manufacturing is a challenge—47% believe it will never fully recover, while others estimate a 5-to-10-year timeline.

Ultimately, unless the U.S. invests in domestic production and expands trade agreements, agriculture may take a lasting hit from the trade war. However, if the Trump administration secures broader global trade access, the potential rewards could be significant.

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Knowing, however, that certainty is almost always an illusion for manufacturers and no long-term plan survives contact with the market, leaders need to focus on the things that they can control, a panel of experts said on May 7 during a webinar hosted by IndustryWeek, Foundry Management & Technology, New Equipment Digest, Plant Services, Smart Industry, American Machinist and Material Handling & Logistics.

You can watch an on-demand replay of this webinar anytime by following this link .

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CNH Industrial (Case IH, New Holland) and AGCO (Fendt, Massey Ferguson) temporarily halted U.S. imports from European plants to assess the tariff impact. Both have since resumed limited shipments. John Deere, which manufactures 84% of its equipment in North America, hasn’t made changes but may face international headwinds due to reciprocal tariffs.

For shortline manufacturers, the picture is just as complex. Many rely on imported components or export specialized equipment globally — making them vulnerable to delays, rising input costs, and shifting demand. Even without headline-grabbing announcements, many in our space are adjusting production, pricing, and supply chain strategies behind the scenes. Small-to-medium sized manufacturers may be particularly at risk, with their thinner margins and more limited access to alternate markets. Shortliners often have to be nimble, but rising tariffs can significantly disrupt this agility.

While major manufacturers have the financial backing to weather these tariff changes, shortline manufacturers may struggle with increased overhead costs and squeezed profit margins. Some have expressed concerns about the long-term sustainability of absorbing these added costs without passing them along to farmers — or if market conditions make it difficult to do so.

In response, some shortliners are exploring new business strategies to mitigate risks, including diversifying suppliers or relocating production to regions with more favorable tariff conditions. Others are forming alliances to pool resources and negotiate better rates for imported materials, aiming to maintain competitive pricing.

Claas, which has significant EU operations but builds combines in Nebraska, will continue delivering presold U.S. units while reducing stock-machine production. The company is considering expanded production in North America to avoid future trade disruptions — a strategy some shortliners are exploring as well.

Johan “Kip” Eideberg of the Association of Equipment Manufacturers said the group supports the President’s goal to strengthen U.S. manufacturing but warned about the risks of disrupting a global supply chain.

“We want to build more equipment here in America,” Eideberg said. “But we also depend on critical inputs from around the world. If those get more expensive, it affects the entire chain — including farmers and rural manufacturers.”

As the 90-day tariff pause plays out, shortline manufacturers — like their larger counterparts — are watching closely, adapting fast, and staying focused on the farmers they serve.

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Adapted from reporting by Matthew J. Grassi, with added context for shortline manufacturers.