Trump Threatens Deere With 200% Tariff Over Production Move To Mexico

by Ryan Hanrahan, University of Illinois’ FarmDoc project

Reuters’ Gram Slattery and Kanishka Singh reported that “Donald Trump said on Monday he would slap a 200% tariff on John Deere’s imports into the United States if the company moved production to Mexico as planned, comments that hit the agricultural equipment manufacturer’s share price. Earlier this year, John Deere announced that it was laying off hundreds of employees in the Midwest and increasing its production capacity in Mexico, a decision that upset workers and some political leaders.”

“‘As you know, they’ve announced a few days ago that they are going to move a lot of their manufacturing business to Mexico,’ Trump said at an event held in western Pennsylvania,” according to Slattery and Singh’s reporting. “‘I am just notifying John Deere right now that if you do that, we are putting a 200% tariff on everything that you want to sell into the United States.'”

“The Republican presidential candidate has frequently said he would slap automakers that move their production to Mexico with a 200% tariff, but this appears to be the first time he has extended that threat to an agricultural equipment company,” Slattery and Singh reported. “…Trump has made erecting extensive tariffs the central element of his economic plan should he beat Vice President Kamala Harris, the Democratic nominee, in the Nov. 5 election. The strategy is designed to protect American jobs from foreign competition, but economists warn his measures will boost inflation.”

“Deere earlier this year said it would lay off 503 workers in Illinois and 310 in Iowa as it faces rising operational costs and declining demand. It’s also acquiring land in Mexico to shift some production previously done in the US,” Bloomberg’s Hadriana Lowenkron and Jenny Leonard reported. “…The world’s top farm machinery maker, which also has operations in South America and Europe, is an iconic American firm with its green and yellow tractors. Moline, Illinois-based Deere said in a statement it is committed to US manufacturing with $2 billion invested in domestic plants since 2019.”

Trump Addresses China Trade Deal, Too

Lowenkron and Leonard reported Monday that “in addition to warning Deere, Trump accused China of failing to honor a deal to buy $50 billion in US agricultural exports and vowed to raise the matter with Chinese President Xi Jinping if the Republican returns to the White House.”

“‘My first call, I’m going to call up President Xi and say you have to honor the deal you made,’ Trump said,” according to Lowenkron and Leonard’s reporting. “‘You made a deal, you’d buy $50 billion worth of American farm product. And I guarantee you he will buy it, 100%, he will buy it.'”

“Trump as president reached a so-called ‘phase one’ trade deal with China in early 2020 that saw the US reduce some duties in exchange for China pledging to increase its purchases of US exports, including $50 billion of agricultural goods,” Lowenkron and Leonard reported. “But actual purchases fell short of that vow, with China importing less than 60% of the promised goods and services — covering food, energy and manufactured products through December 2021, according to a study by the Peterson Institute for International Economics.”