The Canadian government is weighing a second round of counter tariffs, estimated at $130 billion, following an initial $30 billion set of measures. Before implementation, officials are seeking industry input to assess the impact on Canadian businesses.
The first wave of tariffs included items such as mowing equipment and off-road tires, with minimal consequences for the Canadian farm equipment industry. However, the proposed second round targets a broader range of heavy machinery, including essential farm equipment.
Historic Shift in Agricultural Trade
If enacted, this would mark the first widespread imposition of tariffs on farm machinery since World War II. During the war, a duty-free agreement ensured North American agricultural production remained stable despite equipment and labor shortages.
“Almost everything is included in the Canadian tariff schedule—combines, harvesters, balers—nearly every piece of equipment,” said Nancy Malone, Canadian vice-president of the North American Equipment Dealers Association (NAEDA).
With a consultation period open until March 25, NAEDA and other agricultural groups are lobbying for exemptions. “The entire agricultural sector needs to be carved out somehow,” Malone emphasized.
Economic Impact on Farmers and Dealers
A 25% tariff on farm machinery could add tens of thousands of dollars to the cost of high-value equipment. While no significant order cancellations have been reported yet, many dealers and farmers are taking a cautious wait-and-see approach.
The uncertainty is affecting supply chains, as manufacturers cannot accelerate production timelines to avoid potential tariff impositions. “The entire ag sector is impacted, from produce to livestock,” Malone noted.
Political and Trade Tensions
The selection of large equipment for tariffs appears strategically targeted. “Most farm machinery is manufactured in Iowa, Nebraska—Trump country,” Malone pointed out, suggesting Canada is focusing on politically sensitive regions of the U.S.
With fluctuating tariffs disrupting markets and consumer confidence, dealers are struggling to make pricing decisions. “When you can’t predict costs, it’s nearly impossible to plan,” Malone said.
The uncertainty extends to farmers, who face rising equipment costs with no clear resolution. “The whole supply chain is feeling the pressure,” she concluded.