At a recent farm show in Canada, equipment salespeople faced significant challenges as farmers hesitated to commit to purchases, uncertain about the impact of tariffs on agricultural machinery. With some combines priced over $800,000, the potential for tariff-driven price hikes has raised serious concerns about farmers’ budgets, already stretched thin.
While Canada was exempted from the broad global tariffs imposed by the Trump administration on April 2, the country still faces tariffs on steel and aluminum exports to the U.S., as well as on autos that do not meet the Canada-U.S.-Mexico Agreement’s trade terms. As of late last week, Canadian farmers were still unclear about whether agricultural equipment would be affected by the U.S. tariffs or Canada’s retaliatory measures, leaving many to wait weeks for clarification.
The uncertainty surrounding tariffs has caused a noticeable dip in demand for new farm equipment, such as combines, tractors, and seeders. Manufacturers are also pulling back. In March, Case IH, a leading agricultural equipment maker, announced layoffs affecting hundreds of workers in North Dakota and Minnesota, signaling a slowdown in production.
Farmers, including those in Saskatchewan—a major region for wheat, canola, and durum exports—are opting to delay major capital expenditures. Bill Prybylski, president of the Agricultural Producers Association of Saskatchewan, indicated that many farmers were reluctant to purchase expensive machinery amidst the tariff uncertainty. “Farmers will be very cautious about capital spending,” he said, while gesturing toward a John Deere combine at the farm show.
Inside the exhibition halls, while many farmers inspected the latest machinery, few were ready to buy. Manufacturers, too, were wary. Derek Molnar, marketing director for Degelman Industries, a maker of rockpickers, said his company was grappling with uncertainty, unsure of how the tariffs would ultimately affect production and sales.
The timing of machinery purchases, often made months or even a year ahead of delivery, adds to the risk. If tariffs are applied between purchase and delivery, the cost could become prohibitive. Manitoba farmer Gunter Jochum shared his concerns, saying, “We personally backed off on buying new farm machinery. We decided to hang on to our combines longer.”
The ongoing economic uncertainty and looming trade tensions are forcing equipment manufacturers to adjust production. Kip Eideberg, senior vice president of the Association of Equipment Manufacturers, explained that tariffs would disrupt North American supply chains, increase costs for manufacturers, and jeopardize thousands of jobs. About 30% of U.S. agricultural equipment is exported, with Canada being the largest foreign market.
Jamie Pegg, general manager of Honey Bee, a Saskatchewan machinery manufacturer, warned that tariffs could force the company to scale back production to prevent an inventory buildup. “Inventory is something that kills you,” Pegg said.
For Canadian machinery dealers, the uncertainty is creating a challenging business environment. Nancy Malone, vice president of the North American Dealers Association for Canada, emphasized the need to stave off retaliatory tariffs, lobbying the Canadian government on behalf of her members. “We wait,” she said, describing the current situation as one of paralysis.
As farmers, manufacturers, and dealers await clarity on the tariff situation, the agricultural machinery market in Canada is at a standstill, with many uncertain about the future impact of trade disputes.