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The manufacturer of agricultural equipment is
setting tariffs in its decisions about its
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operations in the U.S.
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But rather than expanding its U.S. production, it
will instead shift some work overseas.
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Klaas, a German maker of tractors, harvesters,
and other farm machinery,
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operates a factory in Omaha, Nebraska, where it
builds its Lexion combine.
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Rather than remain in the U.S., however, those
combines are primarily sold in Canada,
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which means that the steel and aluminum used to
make them in Nebraska are subject to reciprocal
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tariffs imposed by the Canadian government in
response to tariffs levied by the Trump
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administration.
In order to avoid those import taxes on
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combines destined for Canada, Nebraska Public
Media reports that Kla will move production of
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the 2026 Lexion 8000 to Germany.
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Company officials said that Kla is continuing
to review pre-ordered data to determine its
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production requirements in Omaha, but that no
layoffs are planned.
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The company indicated that it is expanding its
Nebraska sales and service operations,
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and MPM noted that Kla just broke ground on a
new research and development hub in Omaha this
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summer.
Still, the move reflects some of the risks of
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broadly imposing tariffs on manufacturers with
complex and wide-ranging global supply chains.
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Although the White House has argued that
tariffs on the whole would help bolster
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domestic manufacturing, most economists warn
that it risks sparking trade wars and raising
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prices.
One Creighton University economist told NPM
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that Kla’s move was one example of the
difficulty and folly of raising tariffs
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haphazardly.
I’m Andy Sall.
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This is Manufacturing Now.