(Reuters) -Deere's (DE) quarterly revenue slumped 35% and missed analysts' expectations as more farmers switched to renting equipment due to weak incomes and high borrowing costs, sending its shares down nearly 4.5% in premarket trading on Thursday.

The results from the world's largest farm-equipment maker come as U.S. manufacturers brace for the impact of President Donald Trump's latest tariff announcements.

Trump has imposed sweeping tariffs on imports from Canada, Mexico and China. The levies on Canada and Mexico have been paused for a month, but not on China.

Trump, during a campaign speech in September, warned Deere of additional tariffs if the company moved some of its production to Mexico as planned.

The tariffs have increased uncertainty regarding the impact on U.S. farmers as soybeans, corn, wheat, and meat are particularly vulnerable to retaliatory measures from China, Canada, and Mexico.

Meanwhile, prices of industrial metals, crucial for manufacturing equipment, are rising, driven by Trump's 25% tariffs on steel and aluminum amid insufficient domestic production.

Deere reiterated its 2025 profit forecast, which many analysts had labeled conservative and were anticipating potential upward revisions as the year progressed.

It had projected annual profit in the range of $5 billion to $5.5 billion.

Deere now expects sales in its largest production and precision agriculture segment, which includes larger tractors and combines, to fall between 15% and 20%, compared to its previous forecast of a 15% decline.

The company said its outlook did not account for any impact from potential import tariffs by the U.S. and any retaliatory actions taken by other countries.

First-quarter net sales decreased 35% to $6.81 billion, compared with analysts' estimates of $7.7 billion, according to data compiled by LSEG.

It reported a profit of $3.19 per share, compared with Wall Street expectations of $3.11, helped by a drop in production costs.

(Reporting by Shivansh Tiwary in Bengaluru; Editing by Sriraj Kalluvila)