Posted on March, 4, 2025 at 09:47 am
The trade war is heating up, and American agriculture is at its epicenter. On Monday, President Donald Trump revealed plans to impose tariffs on “external” agricultural products beginning April 2.
“To the Great Farmers of the United States: Get ready to start making a lot of agricultural product to be sold INSIDE of the United States. Tariffs will go on external product on April 2nd. Have fun!” he wrote via social media.
What exactly could be affected is unclear. The announcement follows a string of sweeping tariff threats targeting the nation’s North American neighbors and China, among other countries, along with a 25% tariff on all steel imports.
So far, the Trump Administration has enacted a 20% tariff on all Chinese goods and the promised 25% steel import tariff, while increasing tariffs on all aluminum imports to 25%.
Beginning March 4, the president has pledged a 10% tariff on Canadian energy, a 25% tariff on most other Canadian goods, and a 25% tariff on Mexican imports. Canada and Mexico have vowed similar import tariffs in response, and China has already leveled a 10% retaliatory import tariff that targets agricultural machinery, among other things.
Johan “Kip” Eiderberg, senior vice president of government and industry relations at the Association of Equipment Manufacturers, says he’s “very, very concerned” about a trade war’s fallout.
“They're taxes on American farmers, on American manufacturers, on Americans, period,” he says. “Last time around, when we faced tariffs on steel and aluminum imports from China (in 2018-19), the cost of making equipment in the U.S. went up by 78%.”
Prices surged because ag equipment manufacturing relies on global supply chains.
Manufacturers are evolving to current conditions in real time. Before prices increase, Dan Laux, vice president of Minnesota-based rubber track conversion manufacturer Mattracks, says farmers should consider investing in necessary equipment purchases while there’s still inventory.
“The global market is shifting. On March 4, 2025, new tariffs on raw materials like steel and aluminum will take effect. These changes will drive up manufacturing costs across industries — including ours. While we pride ourselves on being made in the USA, this is a global economy, and even our domestic suppliers must source worldwide,” Laux wrote in a statement to customers. “Today's pricing is the best pricing — you won't see these numbers again. Once our current material stock is used, prices go up. We are actively working with suppliers and our internal purchasing team to control future costs. Now is the time to buy — before price adjustments take effect.”
Beyond short-term price hikes, enacting substantial tariffs threatens to disrupt the world’s mostly unfettered trade marketplace, which was constructed in large part by the United States in the aftermath of World War II. Experts say tariffs will cause the global supply chain to evolve, perhaps away from the U.S.’s interests.
“We've spent decades operating under a free trade agreement in North America, NAFTA, now USMCA. We've set up our manufacturing operations and our supply chains accordingly. And so, if you're putting a 25% tariff on an input coming from Canada, well, that's going to make the equipment a whole lot more expensive,” Eiderberg says.
North American import tariffs will hit farmers particularly hard. The United States has a “healthy trade surplus” with Canada, shipping about $10 million worth of equipment per year across the border while importing around $3.5 billion, Eiderberg continues.
“Prime Minister [Justin] Trudeau has indicated that, if tariffs are put in place by the Trump Administration, Canada will respond with retaliatory tariffs. They will target equipment, and that will hurt Canadian farmers as well,” he says. “No one wins in a trade war. Trade wars never — and tariffs certainly never — achieve the stated policy objectives. All it leads to are cost increases, possibly recession and reduced global competitiveness.”