Deere says it recovered $272 million in tariff refunds, but warns tariff costs remain heavy

Deere & Company said it has recovered $272 million in tariff refunds related to U.S. tariffs that the Supreme Court invalidated earlier this year, a move that helped cushion results as the company continues to plan around a much larger remaining tariff bill. Deere also reiterated that it still expects roughly $900 million in net tariff costs for its fiscal year ending Nov. 1, despite factoring the refund into its outlook.

In its second-quarter earnings release, Deere said the recovery stems from refund claims related to tariffs imposed under the International Emergency Economic Powers Act, or IEEPA, which the Supreme Court invalidated on Feb. 20, 2026. Deere said the $272 million recovery reflects claims that have been filed and accepted by U.S. Customs and Border Protection (CBP).

On a May 21 earnings call, Deere director of investor relations Josh Beal said the company expects net tariff costs of about $900 million for fiscal 2026 after accounting for the refund. Deere’s chief financial officer, Brent Norwood, also emphasized that the company is trying to avoid passing tariff costs on to customers. “We are not surcharging our customers on tariffs,” Norwood said, adding that tariff rates have been inconsistent and shifting quickly.

The company did not describe in its release how the $272 million is reflected across individual product lines, but Deere did give a directional split in management commentary reported by Supply Chain Dive. About 50% of the refund related to Deere’s construction and forestry business, with 30% tied to small agriculture and turf and the remaining 20% associated with large agriculture.

Deere said it is pursuing multiple approaches to reduce tariff exposure rather than relying on customer pricing. Management pointed to cost measures including adjusting sourcing strategies, pursuing product exemptions, and ensuring compliance with import rules under the U.S.-Mexico-Canada Agreement.

The company also highlighted its manufacturing footprint as a partial hedge against cross-border tariff exposure. Deere said roughly 80% of its products are manufactured at U.S. facilities and about 75% of the components used in those plants come from U.S. suppliers. Deere further noted it plans to expand U.S. manufacturing through a $20 billion investment over the next decade, including starting work during the quarter on Deere-designed excavators in Kernersville, North Carolina, following a $70 million factory expansion.

Even with the $272 million recovery in hand, Deere’s disclosures leave key uncertainties in place. The earnings release and reporting around the call did not provide a precise schedule for additional refunds, how much of the expected $900 million in net tariff costs could be offset by future claims, or whether changes in the mix of tariff measures under different U.S. authorities could alter the year-end estimate.

What to watch next is whether Deere can keep absorbing tariff-related pressure while maintaining that it will not impose tariff surcharges. Investors will likely look for continued updates in coming quarterly filings and calls on (1) how CBP processes remaining refund claims, (2) any changes to the $900 million net tariff-cost expectation, and (3) whether Deere’s cost-reduction efforts, including sourcing shifts and exemptions, keep pace with tariff policy changes.