Here’s How Deere (DE) Plans to Absorb $500M Tariff Hit

Farm equipment giant Deere (DE) expects a $500 million hit from new tariffs imposed by the Trump administration in 2025, affecting its construction and forestry divisions. To mitigate this, the company is looking for a global reshuffle of its production across existing factories and evaluate potential price increases to offset these expenses.

Also, Deere is adjusting supply chains to reduce reliance on tariff-heavy imports. Moreover, the company is certifying more goods under the U.S.-Mexico-Canada Agreement (USMCA) to qualify for trade exemptions.

At the same time, Deere plans to invest $20 billion in U.S. manufacturing over the next decade, reducing exposure to foreign tariffs.

While most of its 2025 order books are full, Deere is evaluating price increases for 2026 equipment to offset rising costs. Further, the company is cutting production costs and adjusting inventory levels to align with demand.

Deere Faces Pricing Headwinds

Adding to the challenge, Deere and other makers of farm equipment are facing weak demand as farmers are dealing with lower crop prices and rising costs. Deere’s CFO Josh Jepsen said these extra costs come at a bad time, making things tough for Deere and uncertain for its customers.

Simultaneously, the company remains cautious about raising prices due to low demand and impact of past price hikes from inflation. But Jepsen said Deere expects some price increases, partly due to inflation and possibly tariffs. The company has already raised prices by 2% to 4% for 2026 sprayers and planters, but has not added extra tariff costs yet.

Importantly, Deere can change prices before orders are placed. The company will keep reviewing prices as it launches new products later in the summer and fall.

Is DE a Strong Buy?

Turning to Wall Street, DE stock has a Moderate Buy consensus rating based on eight Buys and seven Holds assigned in the last three months. At $537.08, the average Deere stock price target implies a 6.68% upside potential.

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