US tariff fight shifts to heavy machinery imported from Mexico

The senators pointed to layoffs and plant closures tied to production moves abroad, including CNH layoffs in Wisconsin and a plant closure in Iowa, as well as job cuts tied to Deere production shifts.

“These companies should not be allowed to eliminate American jobs, pay Mexican workers poverty wages and then ship products back to the U.S. for additional profit on the backs of our communities,” the senators wrote.

They also argued that duty-free treatment under USMCA has incentivized manufacturers to relocate production to Mexico, and said any Section 232 action should be paired with changes to the trade agreement.

Manufacturing footprint in Mexico expands

Major heavy equipment manufacturers have significantly expanded their manufacturing presence in Mexico over the past several decades.

Caterpillar operates dozens of facilities across Mexico, including manufacturing, remanufacturing and parts distribution operations across multiple industrial sectors.
According to company information, Caterpillar has about 29 facilities in Mexico employing roughly 14,000 workers across 21 campuses.

John Deere also operates multiple production facilities in Mexico and is expanding its manufacturing footprint, including a new plant in Nuevo León scheduled to begin operations in 2026 producing compact construction equipment for export markets.

CNH Industrial operates a major manufacturing plant in Querétaro, Mexico, which serves as a key part of its North American footprint, employing over 1,000 people. The facility is a joint venture with Quimmco Group and produces agricultural machinery, including tractors and implements.

A national security investigation into heavy equipment imports could lead to new tariffs on machinery and parts moving from Mexico into the U.S., potentially disrupting cross-border supply chains tied to construction, mining and agricultural equipment.

Heavy machinery and parts are typically moved via cross-border truck and rail networks, particularly through Texas border gateways such as Laredo, meaning any tariffs or trade restrictions could affect freight volumes, equipment pricing and project costs across North America’s construction and agriculture sectors.

The probe would mark the latest expansion of Section 232 investigations into industrial sectors, following tariffs or investigations covering steel, aluminum, autos, trucks and other strategic industries.