As U.S. farmers wrestle with weakening crop values and mounting debt, they now face another burden: rising equipment costs triggered by new tariffs from the Trump administration. Two of the world's leading ag machinery manufacturers, AGCO Corp. and CNH Industrial NV, are warning that the latest round of tariffs will force price hikes on planters, tractors, and harvesters worldwide.

The shift stems from tariffs targeting European exports and raw materials like steel and aluminum, key inputs for building agricultural machinery. AGCO, whose premium Fendt combines and tractors are built in Europe, said it's absorbing as much cost as possible-but cannot do so indefinitely.

"We have a stack of costs we must absorb somehow," AGCO CEO Eric Hansotia told Bloomberg. "We're trying to spread them across all global products." AGCO forecasts at least a 1% price increase in 2025, though Hansotia noted the number is fluid given the evolving tariff landscape.

Trump's new tariff plan imposes a minimum 10% duty on many imported goods from the EU, including farm equipment. The EU has agreed to a 15% tariff rate on most exports to the U.S., making it difficult for companies to maintain current pricing without impacting profit margins.

CNH Industrial, maker of Case IH and New Holland machinery, also announced upcoming price increases for 2026 models, although it has yet to disclose the full extent. CNH CFO James Nickolas explained that while the full effect of tariffs hasn't been felt in Q2, the second half of 2025 will bring sharper cost impacts as tariff-affected inventory works through their supply chain.

The tariff spike is compounding issues for U.S. growers, who are already tightening budgets due to lower returns from corn, soybeans, and wheat. CNH also pointed to elevated loan delinquencies among Brazilian farmers, suggesting global agricultural distress is deepening.

"It's cyclically a difficult time for farmers in Brazil," Nickolas said. While pressure there may be peaking, American growers are bracing for a double hit: reduced commodity prices and increased capital costs for essential machinery.

The uncertainty around trade policy, especially with key partners like the EU and China, is driving volatility across the farm sector. Without clarity or mitigation, farmers may be forced to delay equipment upgrades, reduce acreage, or seek alternative financing to stay afloat.

As harvest nears, the cascading effects of international trade policy are moving from factory floors to the field-where U.S. producers are already navigating slim margins.