Tariff on tractors and combines drops 10 percentage points

President Trump cut tariffs on imported tractors, combines and other farm equipment to 15% from 25%, part of a June 1 proclamation that reshapes duties on steel-, aluminum- and copper-based goods. The lower rate takes effect June 8.

The proclamation leaves the underlying metal tariffs in place. It carves out specific end products, including heating, cooling and ventilation systems and mobile industrial equipment, for the reduced rate. The administration framed the change as a way to encourage capital spending in agriculture, housing and manufacturing without giving up the broader metals strategy.

"These products also serve an important role in productive domestic economic activity," the proclamation states.

The cut lands as farmers confront rising input costs and razor-thin margins. American Soybean Association President Scott Metzger welcomed the move.

"Lowering costs on critical equipment and parts is a positive step for soybean farmers and all of agriculture," Metzger said in a statement.

What equipment qualifies for the lower 15% rate?

The proclamation targets finished machinery classified under specific Harmonized Tariff Schedule codes, not raw metal. Farm equipment built from steel, aluminum or copper, including tractors, combines, planters and sprayers, falls in scope when imported into the U.S. Retailers and dealers pass the duty on at the port of entry, and the savings flow through to wholesale pricing only with a lag.

The 15% rate replaces the 25% rate applied since the 2025 metals tariff package. Customs and Border Protection will process entries under the new schedule beginning June 8.

How badly have tariffs hit equipment makers?

John Deere disclosed in Securities and Exchange Commission filings that tariffs and retaliatory tariffs cost the company $600 million in 2025. The Moline, Illinois-based manufacturer assembles most of its equipment domestically, but imports components and finished machines from Europe, Mexico, India and Japan.

Deere paid duties on small-frame skid steer loaders after shifting production to Mexico, according to the same filings. The lower 15% rate should reduce that specific exposure once shipments cleared after June 8 qualify under the revised schedule.

Equipment costs sit near the top of every producer's cost stack. A 10-point tariff reduction on a $500,000 combine trims the duty bill by $50,000 per unit before dealer margins. Bigger machines and specialty applicators carry proportionally higher savings.

What is the White House's rationale?

The administration tied the cut to domestic investment incentives. The proclamation argues that capital goods made of steel, aluminum and copper need predictable tariff treatment so U.S. farms, builders and factories can plan equipment purchases and expand operations. Officials insisted the metals duties themselves remain untouched, preserving the policy lever on imports of the raw materials.

The change does not alter Section 232 quotas or country-of-origin rules. Equipment assembled abroad from U.S.-sourced metal still enters duty-free under existing provisions.

What to watch next

Deere's next quarterly earnings, expected in August, will offer the first read on whether the 15% rate measurably shrinks the company's tariff drag. Soybean and corn planting for the 2026 crop is largely complete, so any margin lift on 2026 equipment purchases will show up in 2027 input budgets rather than this season's operating loans. The June 8 effective date now sets the clock on dealer pricing, used-equipment values and forward order books across the Corn Belt, the Pacific Northwest and California's Central Valley.