US to cut tariffs on agricultural equipment as costs bite
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Duty rate on machinery like harvesters, alongside certain other equipment, will be reduced from 25 per cent to 15 per cent.
PHOTO: DOUG MILLS/NYTIMES
WASHINGTON – US President Donald Trump signed an order on June 2 to cut tariffs on agricultural and industrial equipment, the White House said, as farmers and manufacturers face pressure from surging costs over the Middle East war.
Trump’s proclamation reduces the duty rate on machinery like harvesters, alongside certain other equipment, from 25 per cent to 15 per cent.
Foreign companies can also qualify for a 10 per cent duty rate if their manufacturing equipment contains at least 85 per cent US steel or aluminum, the White House added in a fact sheet.
The changes take effect on June 8 and last until Dec 31, 2027.
Farmers have raised concerns over rising costs ahead of key midterm elections, and face a further squeeze from the Middle East war as diesel and fertiliser prices have surged.
US-Israeli strikes targeting Iran since the end of February sparked Tehran’s retaliation that virtually blocked off the Strait of Hormuz.
The critical waterway normally sees about a fifth of the world’s oil and gas supplies pass through it, and is also essential for the global fertiliser trade.
The blockage has also driven aluminium prices higher as it is a key passageway for deliveries from the Middle East.
“Recent circumstances have affected and are affecting domestic industries that use agricultural equipment, industrial equipment and machinery, and other related products,” Trump’s order on June 1 noted.
It is the latest adjustment to Trump’s steel and aluminium tariffs, after firms pushed back on onerous rules.
US tariffs on steel, aluminium and copper generally stand at 50 per cent.
In April, Trump moved to lower tariffs on products deemed to contain substantial amounts of these metals to 25 per cent – targeting their full value rather than the amount of the metals they contain – in a bid to simplify the system.
Besides agricultural equipment, Trump’s latest order said the lower 15 per cent rate would also apply to certain heating, ventilation and air-conditioning systems that are mainly for residential use. AFP
