Dive Brief:
- Deere & Co. recognized $110 million in tariff refunds fiscal Q3, bringing its total reimbursements for now defunct levies to $382 million, Christopher Seibert, director of investor relations, said on an Aug. 20 earnings call.
- The heavy equipment maker, which secured $272 million in tariff refunds in Q2, does not expect more refunds before its fiscal year ends Nov. 1, executives said. Excluding the duty windfall, Deere expects to pay roughly $750 million in tariffs this year.
- "Going into next year, we would expect a run rate that is going to be closer to right around $1 billion for the year," SVP and CFO Brent Norwood told investors. "So there will be a bit of a step-up in our tariff expense next year as we compare it to this year."
Dive Insight:
Deere's total tariff refund payout nearly mirrors competitor Caterpillar’s reported $392 million in refunds from U.S. Customs and Border Protection. The agency has reimbursed both companies and many others for payments made for country-specific tariffs the Trump administration installed in 2025 that the Supreme Court invalidated earlier this year.
Excluding refunds, Deere has forecasted $1.1 billion in tariff costs for the entire fiscal year, down from a previous estimate of $1.2 billion, Seibert said. The amount is $100 million less than previously projected because of adjustments to sectoral tariffs from the Trump administration, which cut the rate from 25% to 15% for Deere's imports from Europe, according to Seibert.
Deere's overall tariff exposure is further reduced because it manufactures about 80% of its products at the company's U.S. facilities, Norwood said in May, adding that roughly 75% of the components used in those plants come from U.S. suppliers.
Nevertheless, tariffs coupled with higher oil prices have made for a "dynamic inflationary environment," Seibert said.
“And also from a tariff perspective, suppliers experiencing tariffs too; they pass that on to us and negotiate with us around these,” Seibert said.
Uncertainty over input costs and trade flows has also affected customers in Deere's largest segment: production and precision agriculture, Deanna Kovar, president of Deere’s worldwide agriculture and turf division, production and precision, said.
"In general, customer balance sheets remain relatively healthy, yet many are taking a measured approach to capital spending as they evaluate crop margins, cash flow expectations and the broader outlook for agriculture," Kovar said.
