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CNH PLANS TO PASS ALONG TARIFFS FOR CUSTOMERS TO PAY
Feb. 6, 2025
Farm Equipment magazine reports:
During its quarterly earnings call, CNH Industrial said any potential tariff costs would be passed through to customers.
Following the call, Tami Zakaria, analyst with JP Morgan, noted that CNH is monitoring potential tariffs on components from Mexico, Canada and China, affecting about $400 million in imports. "The company plans to pass these costs to customers through immediate pricing adjustments," she wrote in a note to investors.
CNH imports small to midsize tractors into North America from Turkey, Italy, India and South Korea, while large tractors are made domestically, Zakaria noted. Additional, CNH imports planters from Canada and has a plant in Mexico, but that plant only serves the local market.
"CNH is considering reshoring or relocating assembly to the U.S. if tariffs justify it, but such decisions depend on stable policy conditions," Zakaria noted. "They are running scenarios to assess tariff impacts, considering exchange rates and competition. CNH also highlighted that anticipated tariffs might trigger pre-buy behavior from farmers, affecting inventory and sales."
Michael Shlisky, an analyst with DA Davidson, noted, "In discussing the global tariff situation on our call-back, we got the sense that U.S. tariffs between Mexico, Canada and China will have little effect on CNH's earnings, were they to become permanent. CNH also agreed that retaliatory tariffs on U.S. corn and soybeans would be met with grain purchases in other countries, bolstering those farmers' outlooks and partially offsetting the U.S. downside.
"For now, however, CNH is not making wholesale changes in where it sources or produces product, as tariff policies on all sides will need to firm up before a 12-18 month project to adjust to them is implemented."
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