Tractors and (upcoming) tariffs?

[Blue Mule]

CNH Industrial, the company behind Case IH and New Holland equipment, has announced an immediate halt to all equipment shipments from both North American plants and European imports. This move is in response to the uncertainty surrounding upcoming tariffs and their impact on pricing.

According to CNH's official statement:

Thankfully, the last payment to them was sent for our New Holland tractor a few months ago.

Having said that, I want to remind everyone that these tariffs are RECIPROCAL tariffs. And, in many cases President Trump is only applying tariffs at 25-50% of what the other nation is applying to us. It's only fair, and in my opinion it should have been done YEARS ago, but rarely do we ever have a man serving as President who actually puts the U.S. first.

As someone already said, this will be painful for a little while as adjustments are made, but in the long run this will be VERY good for the U.S.

 

[quicksandfarmer]

Thankfully, the last payment to them was sent for our New Holland tractor a few months ago.

Having said that, I want to remind everyone that these tariffs are RECIPROCAL tariffs. And, in many cases President Trump is only applying tariffs at 25-50% of what the other nation is applying to us. It's only fair, and in my opinion it should have been done YEARS ago, but rarely do we ever have a man serving as President who actually puts the U.S. first.

As someone already said, this will be painful for a little while as adjustments are made, but in the long run this will be VERY good for the U.S.

They aren't reciprocal tariffs in any sense that those words would normally be used. Most of the world has low or no tariffs with us now.

The Trump people looked at the balance of trade for each country, and the total trade with that country. They imposed a tariff equal to the trade deficit divided by the total trade. So if a country does $100 billion in annual trade with us, and we have a $20 billion trade deficit, they get a 20% tariff.

Trump has this fixed idea that if we have a trade deficit we're somehow losing money, we're buying more than we're selling. But what he's missing is that the reported trade balance doesn't include investment. Trade plus investment has to balance, if it doesn't your currency will adjust until it does. The reason we run a trade deficit is that the whole world wants to invest in the US, wants to buy US government bonds and the stocks of US companies.

These tariffs are not be good for the US in the short term or the long term. They will choke off the flow of investment. They will also impoverish consumers and we'll probably see a recession this year.

 

[Muhammad]

Please keep this discussion on topic of tariffs related to tractors. You guys know where the politics thread is.

 

[Blue Mule]

They aren't reciprocal tariffs in any sense that those words would normally be used. Most of the world has low or no tariffs with us now.

The Trump people looked at the balance of trade for each country, and the total trade with that country. They imposed a tariff equal to the trade deficit divided by the total trade. So if a country does $100 billion in annual trade with us, and we have a $20 billion trade deficit, they get a 20% tariff.

Trump has this fixed idea that if we have a trade deficit we're somehow losing money, we're buying more than we're selling. But what he's missing is that the reported trade balance doesn't include investment. Trade plus investment has to balance, if it doesn't your currency will adjust until it does. The reason we run a trade deficit is that the whole world wants to invest in the US, wants to buy US government bonds and the stocks of US companies.

These tariffs are not be good for the US in the short term or the long term. They will choke off the flow of investment. They will also impoverish consumers and we'll probably see a recession this year.

So when they say Taiwan is applying a 90% tariff on goods exported to the U.S. and we're in turn going to apply a tariff of 40% on goods they export to us, you're saying that the U.S. is lying? Or fudging the numbers? In the press conference today they specifically listed numerous nations and the exact amount of tariff they have imposed upon us for what they export into the U.S.

 

[Muhammad]

So when they say Taiwan is applying a 90% tariff on goods exported to the U.S. and we're in turn going to apply a tariff of 40% on goods they export to us, you're saying that the U.S. is lying? Or fudging the numbers? In the press conference today they specifically listed numerous nations and the exact amount of tariff they have imposed upon us for what they export into the U.S.

Please take this to the politics thread.

 

[rumwrks]

Copypasta summarization of the currently known tariffs:

• A 10% baseline tax on imports from all countries and higher tariff rates on dozens of nations that run trade surpluses with the United States
• 34% tax on imports from China (actually on top of the previous 20% so 54% total)
• 20% tax on imports from the European Union
• 25% on South Korea
• 24% on Japan
• and 32% on Taiwan
• Vietnam 46%
• India 26%
• Norway 15%
• Moldova 31%
• Thailand 36%
• Iraq 39%
• Democratic Republic of the Congo 11%
• Republic of the Congo 10%
• Angola 32%
• Cameroon 11%
• Falkland Islands 41%
• Mozambique 16%
• Zambia 17%
• Switzerland 31%
• Indonesia 32%
• Malaysia 24%
• Cambodia 49%
• UK 10%
• Zimbabwe 18%
• Malawi 17%
• Syria 41%
• Vanuatu 22%
• Liechtenstein 37%
• Guyana 38%
• Libya 31%
• Equatorial Guinea 13%
• South Africa 30%
• Brazil 10%
• Bangladesh 37%
• Singapore 10%
• ****** 17%
• Fiji 32%
• Tunisia 28%
• Ukraine 10%
• Nicaragua 18%
• Kazakhstan 27%
• Laos 48%
• Côte d'Ivoire/Ivory Coast 21%
• Botswana 37%
• Venezuela 15%
• Philippines 17%
• Mauritius 40%
• Chad 13%
• Nigeria 14%
• Saint Pierre and Miquelon 50%
• Chile 10%
• Nauru 30%
• Algeria 30%
• Brunei 24%
• Jordan 20%
• El Salvador 10%
• Pakistan 29%
• Namibia 21%
• Myanmar 44%
• Sri Lanka 44%
• Serbia 37%
• Madagascar 47%
• Bosnia and Herzegovina 35%
• Lesotho 50%
• North Macedonia 33%
• Norfolk Island 29%
• Réunion 37%

Canada and Mexico are not on the new list specifically.

 

[jyoutz]

Copypasta summarization of the currently known tariffs:

• A 10% baseline tax on imports from all countries and higher tariff rates on dozens of nations that run trade surpluses with the United States
• 34% tax on imports from China (actually on top of the previous 20% so 54% total)
• 20% tax on imports from the European Union
• 25% on South Korea
• 24% on Japan
• and 32% on Taiwan
• Vietnam 46%
• India 26%
• Norway 15%
• Moldova 31%
• Thailand 36%
• Iraq 39%
• Democratic Republic of the Congo 11%
• Republic of the Congo 10%
• Angola 32%
• Cameroon 11%
• Falkland Islands 41%
• Mozambique 16%
• Zambia 17%
• Switzerland 31%
• Indonesia 32%
• Malaysia 24%
• Cambodia 49%
• UK 10%
• Zimbabwe 18%
• Malawi 17%
• Syria 41%
• Vanuatu 22%
• Liechtenstein 37%
• Guyana 38%
• Libya 31%
• Equatorial Guinea 13%
• South Africa 30%
• Brazil 10%
• Bangladesh 37%
• Singapore 10%
• ****** 17%
• Fiji 32%
• Tunisia 28%
• Ukraine 10%
• Nicaragua 18%
• Kazakhstan 27%
• Laos 48%
• Côte d'Ivoire/Ivory Coast 21%
• Botswana 37%
• Venezuela 15%
• Philippines 17%
• Mauritius 40%
• Chad 13%
• Nigeria 14%
• Saint Pierre and Miquelon 50%
• Chile 10%
• Nauru 30%
• Algeria 30%
• Brunei 24%
• Jordan 20%
• El Salvador 10%
• Pakistan 29%
• Namibia 21%
• Myanmar 44%
• Sri Lanka 44%
• Serbia 37%
• Madagascar 47%
• Bosnia and Herzegovina 35%
• Lesotho 50%
• North Macedonia 33%
• Norfolk Island 29%
• Réunion 37%

Canada and Mexico are not on the new list specifically.

25% tariffs on South Korea is going to upend the affordable tractor brands market.

 

[Muhammad]

25% tariffs on South Korea is going to upend the affordable tractor brands market.

At this point we should compile a list of tractors that are assembled in the U.S. as the tariff impact will be much lower.

JD and Kubota specifically assemble many models in the U.S.

 

[Tpondel]

At this point we should compile a list of tractors that are assembled in the U.S. as the tariff impact will be much lower.

JD and Kubota specifically assemble many models in the U.S.

Assembled yes. But are the parts made in US?

 

[jyoutz]

At this point we should compile a list of tractors that are assembled in the U.S. as the tariff impact will be much lower.

JD and Kubota specifically assemble many models in the U.S.

True, but parts are imported.

 

[charlessenf]

Ah, the dismal science.

We have seen administrations attempt to control what corporations do with laws, and regulations, and tariffs, too. I've been watching for over sixty years.

They are trying to control the markets. instead of learning how to benefit from the ways the markets work best. We seem to think our way is better than 'their way' even as experience has shown that we don't always get it right.

We are but a small fraction of the world's population - indeed, or population has recently stagnated and is aging fast.

The purported rationale for these 1890 tariffs is to force manufacturing to return to our shores. But they moved off shore because the incentives and ROI dictated the move - they kept their HQ in the US because of the protection such citizenship afforded them, their shareholders and their profits.

Capital has no conscience or loyalty. Look at all the Russian Oligarchs going along with (and funding) Putin.

Look at the Dias at the recent presidential inauguration and our Pay Pals from South Africa pushing their grand dad's Technocracy from the White House.

We have our Oligarchs and they have us. Tariffs are the least of this republic's worries.

The price of an Indian John Deere - is that your concern?

 

[ismilelots]

I think this might be a good incentive for JD and others to bring jobs back to the US. As for parts, they used to be made in the US as well until NAFTA encouraged world trade and had companies shopping for cheap labor across the globe.

 

[tradosaurus]

Assembled yes. But are the parts made in US?

That would be true for almost every manufacturer.
I think Tesla can lay claim to the most american made car.

 

[bdhsfz6]

In the short term, I see businesses in the US using these tariffs to make a profit.

I ordered a Canadian made implement last month through my local lealer in PA. The dealer in turn ordered it from a distributor in OH who had several in stock. The distributor told the dealer there would be a 20% price increase unless the implement was shipped before the tariff took effect.

Luckily, the original effective date was delayed and I was able to take delivery before the tariff took effect.

The distributor did not pay this tariff since the implement was already in stock. They were going to charge the dealer (and me) 20% more, which would have been pure profit.

 

[jyoutz]

I think this might be a good incentive for JD and others to bring jobs back to the US. As for parts, they used to be made in the US as well until NAFTA encouraged world trade and had companies shopping for cheap labor across the globe.

With the cost of US labor and benefits (health insurance), companies will likely rely on new manufacturing that is heavy to robotics. The 1970s manufacturing jobs aren’t going to return.

 

[Blue Mule]

Please take this to the politics thread.

No. You brought it up, and it's 100% relevant here because most of these compact tractors come from Korea and other western Pacific and Indian nations.

He is asserting that these tariffs are not being described in honest fashion, and I don't think that's true.

As far as how it's affecting the ability to buy a tractor, it's obvious that there is already an effect. The point is that in the long run this will benefit the U.S.

 

[5030]

In the short term, I see businesses in the US using these tariffs to make a profit.

So do I simply because with existing pre tariff stock, there is no tariff imposed but greedy businesses WILL impose the tariff percentage on items already in stock to make a larger profit which is totally BS.

 

[5030]

At this point we should compile a list of tractors that are assembled in the U.S. as the tariff impact will be much lower.

JD and Kubota specifically assemble many models in the U.S.

The issue with your statement is, what percentage of the units are made here and what percentage are made offshore in countries with the imposed tariff's

It's going to be very complex, determining what percentage is made offshore and what percentage is produced here. Case in point Kubota as an example. Kubota produces some sub assemblies like loaders for instance, in their Georgia plant (backhoe's included) but import a gob of tractors and engines from Japan and last time I bought Kubota filters, they were marked made in Malaysia for Kubota. Going to be interesting in as much as this administration really has no idea what is made where actually.

It will be interesting to see how they determine what is tariff applied and what isn't.

World class manufacturing has really diluted and blurred that where it's made statement today. With some stuff made here (at least in the case of Kubota) and other stuff made offshore and imported, will be interesting in the least.

One thing for certain and that is Mahindra will get slammed as Indian products are ALL subject to tariff but again, what is already here in America, should not be tariffed though I can see manufacturers applying it to already stateside tractors and accessories, just for the greed factor.

Like the Mahindra mini Jeep that is assembled in their facility in Michigan but 100% of the parts come in, in a container from India. All that is done here is the assembly of the imported parts.

 

[tjandrews]

With the cost of US labor and benefits (health insurance), companies will likely rely on new manufacturing that is heavy to robotics. The 1970s manufacturing jobs aren’t going to return.

Not just manufacturing jobs.
Amazon, who sells, among other things, tractor parts (Must keep this on-topic), built a regional warehouse in my area a few years ago. Micron, an American company that builds memory chips (No doubt some of which are destined for new tractors), is attempting to build a new chip fab in the area(if the federal money doesn't dry up), as well.
Both are reputed to be heavily reliant on robots, to keep labor costs down.

 

[jyoutz]

No. You brought it up, and it's 100% relevant here because most of these compact tractors come from Korea and other western Pacific and Indian nations.

He is asserting that these tariffs are not being described in honest fashion, and I don't think that's true.

As far as how it's affecting the ability to buy a tractor, it's obvious that there is already an effect. The point is that in the long run this will benefit the U.S.

You are speculating regarding long term benefits. Nobody knows how this will play out. The last experience this country had with across the board tariffs in the 1930s certainly didn’t end well.