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Equipment sector pleased with tariff removal

Equipment sector pleased with tariff removal

Some manufacturing costs rose by almost 10 percent, one industry group said

By Diego Flammini
Staff Writer

Farm equipment manufacturers are breathing a sigh of relief after the U.S. and Canada lifted respective tariffs on steel and aluminum.

The U.S. imposed 25 percent tariffs on steel imports and 10 percent tariffs on aluminum imports from Canada and Mexico nearly one year ago. Canada and Mexico responded with similar levies on steel and aluminum, as well as other ag products.

The additional costs added to equipment manufacturing had a domino effect on the ag industry, said Dennis Slater, president of the Association of Equipment Manufacturers.

“Some manufacturers looked at a production cost increase of 6 to 7 percent to bring the product to market,” he told “Now, the farmer is paying 6 or 7 percent more for a product but they’re not getting any increased productivity out of it.”

The tariffs also made U.S. manufacturing less competitive, hurt export market opportunities and forced some companies to slow down production.

“Why would a farmer want to spend more money on equipment, especially in a time where there’s uncertainty about if there’s even a market for their products,” Slater said.

Aside from the dollar amounts associated with retaliatory tariffs, equipment manufacturers also faced administrative challenges.

“It was also the lack of ability to plan,” Vernon Schmidt, executive vice president of the Farm Equipment Manufacturers Association, told “As long as the tariffs were in place, nobody knew if there was going to be any relief, how long they would be in place or if there would be any kind of exception.”

The levies on steel and aluminum were a major hurdle in ratifying the United States-Mexico-Canada Agreement (USMCA).

With that blockade out of the way, it’s time to pass the trade agreement, Schmidt said.

“The lifting of these tariffs is a promising development in the pursuit of a ratified USMCA,” he said. We urge the U.S. Congress to act without delay.”

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