Tariff disputes are pushing steel and iron prices higher and stacking new component-level duties onto farm equipment built in North America, CLAAS senior vice president Eric Raby said this week.

The German-based global equipment maker is absorbing cost increases tied to the U.S.–China trade war and parallel duties on imported metals. Raby, who leads CLAAS's Americas operations, said raw material inputs have moved higher and downstream components now face added levies.

What is driving the cost pressure?

"A lot of components that we use to make the machines are going to get tariffed or taxed," Raby said. Steel and iron enter CLAAS factories as raw inputs, then reappear as welded frames, driveline parts and cutting components. Duties applied at the metal stage cascade into every subassembly that contains tariffed stock.

Even components sourced domestically can rise when domestic mills raise tags to match the landed cost of imports.

How exposed are combines and large implements?

CLAAS builds combines, forage harvesters, tractors and balers, with assembly concentrated in Omaha, Nebraska, and a separate LEXION combine line. Raby's region covers dealer networks across the United States and Canada.

Equipment list prices typically absorb input cost increases with a lag of one or two production cycles. Dealers and manufacturers have already announced selective price actions across the tractor and combine segment this year. Raby's comments point to another round, since steel-heavy machines such as combines and large square balers carry more exposed metal content per unit than lighter implements.

Rising equipment tags hit farm budgets at the same time grain prices remain range-bound, a margin squeeze that complicates replacement decisions during the current down cycle in the ag economy.

How wide is the input spread?

The price of steel and iron has moved higher, Raby said, without specifying percentage moves. U.S. Section 232 tariffs on steel and aluminum have remained in place at 25% on most origins since 2018, with successive administrations adjusting country-by-country exemptions. Counter duties from trading partners add a second layer on U.S.-built machines exported overseas.

For CLAAS, which manufactures internationally and sells internationally, that creates a matrix effect: a combine assembled in Nebraska may contain German transmissions, Brazilian headers and Chinese hydraulic fittings, each subject to a different duty schedule.

What does the industry want from policymakers?

Raby framed the issue as ongoing uncertainty rather than a single policy fix. Equipment manufacturers operate on multiyear product cycles and long tooling lead times. Tariff schedules that shift quarterly complicate capacity planning and supplier diversification.

The dispute "continues to drive up" costs, Raby said, a dynamic echoed in recent ag lender surveys showing equipment loan volumes running below year-ago levels.

What happens next?

Watch for the next round of manufacturer price books, typically released mid-summer for the following production cycle. Any further escalation of duties on steel, iron or finished components from major origins would likely push another wave of increases into model-year 2024 tractors and combines. Raby's comments come as farm groups press Congress for relief on input costs ahead of the next farm bill debate, with equipment affordability now a recurring line item in producer testimony.