Heavy equipment manufacturer John Deere expects US import tariffs to total $500 million by the end of its fiscal year in October. The company paid $100 million in tariffs during its fiscal second quarter, which ended on April 27, and anticipates an additional $400 million in expenses in the second half of the year.

To offset the rising tariff costs, Deere plans to increase prices and reduce operational expenses. However, trade uncertainty and high interest rates are expected to weigh on demand for agricultural equipment, with industry-wide large machinery sales projected to decline by 30 percent in the US and Canada in 2025.

Deere currently manufactures 79 percent of its completed goods in the US and sources 76 percent of its components domestically. The company plans to invest $20 billion over the next decade to expand domestic production. To mitigate the impact of tariffs, Deere has begun securing exemptions through the US-Mexico-Canada free trade agreement for imported components from Mexico.

Despite efforts to stabilize operations, Deere has lowered the low end of its annual profit forecast to $4.75 billion, down from the previous estimate of $5 billion. Second-quarter profit fell 24 percent year-on-year to $1.8 billion.