Trump Threatens John Deere with Tariffs

Trump Threatens John Deere with Tariffs

On Monday, Donald Trump announced his intention to impose a 200% tariff on John Deere imports into the United States if the company proceeds with its planned relocation of production to Mexico. This threat comes amidst a string of similar warnings issued by Trump concerning automakers moving operations to Mexico.

John Deere’s Relocation and Reaction

Earlier this year, John Deere announced its decision to lay off hundreds of employees in the Midwest and expand production in Mexico, a move that sparked anger among workers and politicians. Trump’s tariff threat has sent John Deere’s share price tumbling by over 1.5% in after-hours trading, though a company representative has declined to comment.

Trump’s Protectionist Agenda

Trump’s tariff strategy aims to protect American jobs from foreign competition and is a centerpiece of his economic plan. However, economists have cautioned that such measures could lead to increased inflation. Trump has also emphasized the importance of securing Chinese purchases of U.S. agricultural products, pledging to hold Chinese President Xi Jinping accountable for fulfilling a $50 billion purchase commitment made in a previous trade deal.

Targeted Sectors and Electoral Implications

Trump’s tariff threats have primarily focused on the automotive industry, but John Deere’s case marks an expansion to agricultural equipment manufacturers. These sectors, along with farmers and industrial workers, form a key part of Trump’s voter base. Ensuring strong turnout from these constituencies could prove crucial in his bid to defeat Democratic nominee Kamala Harris in the November election, particularly in battleground states like Pennsylvania.

Background on the China Trade Deal

The “Phase 1” trade deal between China and the United States, inked during Trump’s presidency, entailed a reduction in U.S. tariffs on Chinese goods in exchange for pledges from China to purchase larger quantities of American agricultural products, energy, and manufactured goods. Although Trump initially projected China would purchase $50 billion worth of U.S. agricultural products, China’s purchases fell short of that target.

Trump’s Confidence in Xi Jinping

Trump expressed confidence that President Xi will fulfill the $50 billion purchase commitment, stating, “I guarantee you, he will buy it, 100% he will buy it.” Trump plans to make a phone call to Xi to emphasize the importance of honoring the deal.