CLAAS, a manufacturer of combines primarily serving farmers in Western Canada, is relocating some of its production from the United States to Germany. This shift aims to mitigate uncertainties related to tariffs. Traditionally, CLAAS has assembled its North American machinery at its Omaha, Nebraska, plant. However, starting with the 2026 model year, the company will move the assembly of its LEXION 8000 Series machines destined for Canada to its facility in Harsewinkel, Germany.

In a statement, CLAAS explained, "This production allocation is a strategic response to the current tariff and trade framework — in particular existing U.S. customs duties — helping to keep prices competitive for farmers." The company did not disclose specific sales figures but noted that its main market includes farmers in Alberta, Saskatchewan, Manitoba, and, to a lesser extent, Eastern Canada. CLAAS confirmed that this decision will not lead to layoffs at its Nebraska facility, which will continue to focus on assembly for the U.S. market.

Experts suggest that CLAAS's decision reflects broader concerns about future trade negotiations, particularly regarding the Canada-U.S.-Mexico Agreement (CUSMA). William Huggins, an assistant professor of finance and business economics at McMaster University, stated that the current trade dispute has been relatively restrained. He warned that renegotiations could complicate matters further, saying, "It can get a lot messier and it can get a lot more difficult, economically speaking. We should expect to see businesses behaving cautiously."

Colin Mang, an economist at McMaster University, noted that CLAAS is likely among the first companies to make such a move. He anticipates that more companies will announce changes to their supply chains in response to potential tariffs. "You're going to see more companies over the next few months start to announce changes to their supply chains and changes to their manufacturing processes to get ahead of potential tariffs that could come in next year," Mang said.

The stability provided by the free trade agreement between Canada and Germany through the European Union is a significant factor in CLAAS's decision. Mang emphasized that certainty regarding tariff-free access is crucial for multinational companies as they plan for the future.

For farmers, the cost of a new combine is a substantial investment. Jeremy Welter, vice president of the Agricultural Producers Association of Saskatchewan, estimated that a new machine can exceed $1 million, excluding additional equipment like headers. Welter, who farms northeast of Kerrobert, Saskatchewan, described the combine as an essential tool during harvest season. He remarked, "When you're talking about that much money for a piece of machinery that you are realistically going to use, you know, six, maybe seven, weeks a year, it's a significant investment."

Welter views CLAAS's production shift as a positive business decision that could lead to lower costs for farmers in Western Canada. Huggins added that while transporting machinery across the border may seem simpler, the financial implications are paramount. "If it's cheaper to send across an ocean rather than send it across a heavily tariffed border, that's what they'll do," he said.