John Deere has reported a significant drop in profits, citing the impact of US tariffs on steel and aluminium. The company's net income fell 26% in the third quarter compared to the same period last year, with sales declining by 9%.
The farm equipment manufacturer said tariff costs reached approximately $200 million in the quarter, bringing the year-to-date total to $300 million. It expects another $300 million in tariff expenses by the end of the year. Although John Deere assembles 80% of its equipment in the US and imports only 25% of its components, the tariffs have raised manufacturing costs.
The company plans to invest more than $20 billion in America over the next decade and employs over 30,000 people across 60 US facilities. However, the intended benefits of the tariffs—boosting domestic manufacturing and encouraging farmers to buy American—are undermined by a slump in crop prices, which reduces demand for new equipment.
Farmers are holding off on purchases, opting to repair old tractors, buy used machinery, or rent equipment. Retaliatory tariffs from other countries have also hurt US agricultural exports, with exports to China dropping by more than 50% in the first half of the year. The US agricultural trade deficit reached $19.7 billion between January and April 2025.
Policy experts note that uncertainty over input costs and market conditions makes long-term planning difficult for both companies and farmers. John Deere declined to comment further, referring to its earnings report and its reliance on US-made parts and assembly.
