Tariffs Are Back: What to Learn From Last Time Before It Hits the Equipment Market Again

Let’s talk tariffs.

On April 2, the Trump administration announced a new round of tariffs, including a 10% universal rate, and some as high as 145% on Chinese goods. In response, China hit back with retaliatory tariffs of 125% on American goods and canceled key ag exports like 12,000 metric tons of U.S. pork. If you’re in the ag world, you’ve seen this movie before.

So what can we learn from the first act of this trade war – and how can these learnings help farm equipment dealers prepare for what’s coming next?

During the first Trump administration, U.S. agricultural exports lost over $27 billion due to retaliatory tariffs – $25.7 billion of that from China alone, largely tied to soybean trade disruption (Statista). In response, the USDA rolled out the Market Facilitation Program (MFP), offering relief payments ranging from $15 to $150 per acre, capped at $125,000 per entity.

But that payment wasn’t distributed evenly across all farmers. According to  The top 10% of recipients claimed half of all aid, while the majority of farmers received far less (AgWeb, USDA).

From a machinery market perspective, we saw these economic ripples show up quickly. If you’ve been one of our long-time subscribers, you may remember us reporting  that the Tractor Zoom Combine Index dropped about 15% from mid-2018 to late 2019, bottoming out in October 2019. Farmer confidence swung wildly as commodity prices fell even further. Add in a 78% increase in steel and aluminum costs (farmequip.org) – core materials in ag equipment manufacturing – and both buyers and dealers felt the squeeze.

When MFP payments hit and confidence returned, we saw a rebound almost instantly in 2019’s end-of-year equipment purchases. The Combine Index climbed to 109 by early 2020. That bounce-back was initially fueled by relief checks, and later by tight grain supplies, COVID-induced global shifts, and the Ukraine-Russia war – factors that supercharged commodity prices and helped move iron again. 

It wasn’t just the combine market that moved, either. Higher horsepower tractors along with late-model combines were heavily affected, while the boost to non-motorized categories like headers were more muted. 

Fast forward to the present day and some key factors have changed. Interest rates are considerably higher, and inventory levels at many dealerships are elevated, resulting in holding costs eating into margins faster than before. We have also just come off some of the most profitable years farmers have ever experienced. This bull market period had the effect of pushing many farmers to accelerate their typical purchasing patterns. 

If tariffs push new equipment prices higher (or create tighter supply due to disrupted imports) used equipment could once again become the farmer’s fallback. But there’s also a risk. If demand softens and supply builds, particularly in categories like high-horsepower tractors or combines, used values may drop just like they did in 2018-19.

The reality is that we’re once again back in uncertain territory. But this time, dealers have more tools – and greater urgency – to respond proactively.

Uncertainty is par for the course in ag, but that doesn’t mean we’re powerless to respond. Here are some proactive measures that benefited dealerships last time around: 

Auction trends give real-time feedback. If values start slipping in your region or for specific categories, that’s a cue to adjust pricing strategy, marketing push, or inventory volume. Tractor Zoom’s equipment data tools help dealers monitor this in near real-time. Stay clued into the news as well to learn of commodity swings or new government payment programs. 

In the last downturn, many dealers held on too long while waiting for prices to bounce back. But as we saw in 2019, that bounce didn’t come until government money hit the farm gate. AND REMEMBER – the eventual catapult of high grain prices had nothing to do with tariffs and is not guaranteed this time around. What is a certainty, though, is that holding inventory now is way more expensive than in past periods. It pays to be proactive in adjusting your lots’ pricing, wholesaling stale inventory, or using auctions strategically to clear aging units.

Even if whole goods sales are softer, increasing absorption through stronger parts and service operations is something you can control. Our Customer Success team is meeting with dealers to double down on training their teams, building better internal processes, and getting more aggressive on aftermarket sales. 

Farmers are also watching these market shifts closely. I know we are tracking them on our farm. If you share the insights you are seeing to help buyers make smart timing decisions – whether on purchasing or trading – they’re more likely to stick with your dealership long-term.

Tariffs aren't just a global trade policy – they’re a local farm and dealership reality. When exports slow and confidence drops, equipment sits longer, values drop faster, and margins shrink. We’ve seen it before. But the dealers who win are the ones who stay nimble, act early, and focus on what they can control.

History doesn’t repeat exactly, but it does rhyme. We’re here to help you decipher the next verse.