From coffee shops to Capitol Hill, tariffs dominate conversations these days. Advocates say they’ll unlock new export markets for agriculture and bring manufacturing jobs home. Critics counter that driving competitors and allies toward other trade partners will cause lasting geopolitical damage.
If there’s one thing for sure, it’s that President Donald Trump’s ongoing tariffs are carving new trails across an interconnected global capitalist system.
Given that agricultural products comprise about 10% of all U.S. goods exported, farm machinery sits at the heart of these contentions. Retaliatory measures have repeatedly targeted U.S. agricultural production and its trade tools over the last few years.
China, for example, slapped a 10% retaliatory tariff on U.S. ag equipment in February 2025. Ever since, it’s been an uncertain farm equipment market. Economists tracking these developments see no end to the volatility.
“Over the second half of 2026, I think we’re in an escalatory phase,” said economist Marcos Carias, who specializes in forecasting trade risk for Coface, an insurance firm that protects businesses against payment delays and default. “As long as we have the Trump administration, this will be something that is in the background and can happen at any moment.”
Unlike previous presidential administrations, Carias said Trump perceives tariffs as a versatile weapon wielded to achieve unrelated policy objectives, rather than a narrow protectionary measure to defend fragile industries — such as U.S. sugar and cotton — and to settle specific trade disputes.
“The administration sees them as an all-purpose tool. … We’re the largest consumer market in the world; everybody exports towards us. That gives us leverage that we’re not exploiting. Whenever we want to achieve something with a country that exports a lot to us, this is like a lever that we can easily action to extract what we want to get,” Carias said.
But there’s a lot going on behind the headlines. Carias highlighted the administration’s 25% tariff on Brazil. The nation produces 7% of imported milling machinery. He attributes the tariffs to diplomatic pressure, even though they’re chalked up to ethanol market protections. The tariffs were levied several months before Brazil’s elections, in which the incumbent president, Luiz Inácio Lula da Silva, a vocal critic of current U.S. policy, faces Trump ally Flávio Bolsonaro.
Don’t forget hidden costs
It’s not just whole machines that face tariffs. Farm machinery components likewise face import taxes, which make machines assembled domestically more expensive to produce. Carias said quantifying these hidden costs is “a little bit more insidious” and difficult to catch.
“The widest tariff that has been applied on U.S. imports is on steel and aluminum. To the extent that there is machinery made in the United States, that trickles through. Those metals are inputs for machinery made in the United States, and that hits [price tags],” he said.
Even when “wins” happen — such as when China rescinded its farm machinery retaliatory tariffs following negotiations — there are repercussions. Questions remain about how long agreements will last and how durable they are.
The equipment market runs on certainty. Dealers cutting contracts with farmers rely on forward guidance. They err on the side of caution to mitigate potential losses. Carias said this factor should be considered when evaluating tariff policy against short-term gains. Maintaining long-term market stability is imperative.
“The other big factor is uncertainty. You always have to be on the lookout for confirmation that [key] markets for U.S. farmers are going to be there,” Carias said.
Is it effective? Depends on who you ask. Sure, more favorable deals might be hammered out now. But domestic manufacturing can’t pivot in a single presidential term. Supply chains are built over decades. Bringing manufacturing home isn’t a simple process.
In the long run, Newton’s laws do not apply to global farm machinery markets. Equipment prices aren’t like gravity. What goes up doesn’t always come down. Tariff-driven price hikes could stay elevated. That means farmers will probably continue to shoulder an increasing cost burden on the dealer lot — a heavy lift, given the other stiff economic headwinds currently blowing across the Midwest Plains.