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Evaluating the Temporary Tariff Relief in the U.S. Agricultural Machinery Sector

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  • Kim, Dongin
  • Steinbach, Sandro

Abstract

This article evaluates the market impacts of recent U.S. trade policy pivots on agricultural machinery imports under HS headings 8432 (soil preparation and seeding equipment) and 8433 (harvesting and threshing machinery). Utilizing product-level trade elasticities, we conduct an ex-ante simulation to project 2026 imports following the implementation of Presidential Proclamation 11021. While the initial April 2026 action imposed a steep 25% Section 232 tariff, the subsequent June 1 modification retroactively lowered the rate to a temporary 15% through 2027 to mitigate severe equipment shortages. Our projections indicate that the 15% tariff preserves an estimated $114.3 million in soil preparation equipment and $478.9 million in harvesting machinery compared to the 25% scenario; however, overall imports remain 20% to 25% below 2025 levels. Furthermore, domestic manufacturing indicators reveal severe cost-push constraints, suggesting domestic production cannot serve as an immediate or affordable cushion against this broader market shock.

Suggested Citation

  • Kim, Dongin & Steinbach, Sandro, 2026. "Evaluating the Temporary Tariff Relief in the U.S. Agricultural Machinery Sector," ARPC Brief 404815, North Dakota State University.
    • Handle: RePEc:ags:arpcbr:404815
    DOI: 10.22004/ag.econ.404815
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    References listed on IDEAS

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    1. Fontagné, Lionel & Guimbard, Houssein & Orefice, Gianluca, 2022. "Tariff-based product-level trade elasticities," Journal of International Economics, Elsevier, vol. 137(C).
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