John Deere is the form of homegrown, home producer President Donald Trump claims to help, but his tariffs and hostility towards China are threatening its backside line.
The Moline, Sick.- based mostly tractor and agriculture equipment producer boasted a file revenue simply two years in the past, however since then its luck has turned. That’s partly due to instability associated to tariffs and an financial struggle with China. Final month, the corporate mentioned it will lay off 238 manufacturing staff in Illinois and Iowa, citing “decreased demand and lower order volumes.”
Within the third quarter, the corporate’s web revenue fell by 1 / 4 in comparison with the identical time final 12 months and its worldwide gross sales and revenues fell by 9% to $3.9 billion, down from $5.8 billion final 12 months. The corporate additionally lowered its steerage for its annual web revenue by way of the tip of the 12 months.
On the corporate’s most up-to-date earnings name, investor relations director Josh Beale mentioned there have been “pockets of optimism” throughout John Deere’s enterprise, however added clients could also be feeling the sting of tariffs and instability.
“Given challenging industry fundamentals and evolving global trade environment and ever-changing interest rate expectations, our customers are operating in increasingly dynamic markets, which naturally drives caution as they consider capital purchases,” Beale mentioned.
Agriculture is an trade in fixed flux. Elevated crop costs imply farmers can think about shopping for new tractors and tools, but when not, they might purchase used tools or maintain off on an enormous buy. New tractors can price tens of hundreds of {dollars} relying on their capabilities, and lots of farmers depend on credit score for these purchases. Costs are low for the 2 most important American crops: corn and soybeans. Corn is promoting for 50% lower than what it did in 2022, whereas costs for soybeans are down 40%, The New York Occasions reported.
John Deere’s clients, other than the confusion of tariffs, are additionally dealing with headwinds from an financial battle with China. In response to Trump’s tariff escalations, the world’s second-biggest economic system retaliated with tariffs on U.S. soybeans, of which final 12 months it imported $13 billion—or about equal to the market cap of John Deere competitor Kubota. Soybean imports to China are down by 51% this 12 months, and the nation hasn’t made any superior soybean purchases for the upcoming harvest, the NYT reported.
If John Deere clients make fewer tools purchases, the cutback will hit the corporate’s home manufacturing, which makes up 80% of its U.S. gross sales and 1 / 4 of its worldwide gross sales.
John Deere didn’t instantly reply to Fortune‘s request for remark.
Nonetheless, there could also be a silver lining to Trump’s insurance policies for John Deere. The corporate may benefit from bonus depreciation modifications within the “One Big Beautiful Bill,” handed in July, which provides farmers a tax break on tools purchases.
Due to its sturdy home manufacturing, the corporate might also be extra proof against tariffs on overseas imports than opponents Kubota, Fendt, and Mahindra, which manufacture extra of their merchandise internationally.
Fortune International Discussion board returns Oct. 26–27, 2025 in Riyadh. CEOs and world leaders will collect for a dynamic, invitation-only occasion shaping the way forward for enterprise. Apply for an invite.
