Wells Fargo sees ‘net neutral’ impact for Deere under Section 232

Wells Fargo says that Section 232 replaces IEEPA with net impact skewing neutral to negative across the firm’s coverage. Wells believes risk is concentrated in companies that benefited from USMCA exemptions. Regarding Deere (DE), the firm estimates the company’s effective IEEPA rate on imports was approximately 21% vs. 25% in the new Section 232 tariff amendment. However, Deere had previously paid tariffs on indirect steel and aluminum content under Section 232, which makes up for the gap in rate between IEEPA and the new Section 232 standards. Overall, Wells sees the impact as net neutral.