Former President Donald Trump threatened on Wednesday to slap a “200% tariff” on John Deere if the agricultural machinery giant leaves the United States and moves its production to Mexico. The brazen threat came as it was reported that John Deere is contemplating shifting some of its manufacturing operations across the border, purportedly to lower costs and simplify production.
Speaking at a rally for his campaign, Trump addressed the potential move, positioning himself as a savior of American manufacturing jobs. “If John Deere wants to take their production into Mexico, I’ll tell you this: there’s going to be a 200 percent tariff on every single item they try to bring back into this country,” Trump declared to the cheering crowd.
The former president has been a strong proponent of tariffs and, in particular, on firms that outsource jobs beyond the borders of the United States. In his presidency, Trump had imposed tariffs on several items, including steel and aluminum under his “America First” trade policy aimed to bring more manufacturing back to U.S. shores.
One of the world’s largest producers of farm machinery, construction equipment, and other industrial products, John Deere made no statements about moving production elsewhere. Yet, like many companies, John Deere has had to bear increasing labor and operating costs in the U.S. Relocation to Mexico will give John Deere cheaper labor and supply chain benefits.
In reaction to the statement by Trump, John Deere proceeded to declare that its American force is priceless for its firm. “We are continually looking for ways to foster long-term growth and competitiveness. As we maintain our U.S.-based operations, we also must consider the global nature of our business,” the company stated, referring to it as a whole without thinking about moving its location somewhere else.
A tariff threat would likely resonate with any Midwestern voter because the jobs brought into these areas through John Deere’s factories have been aided. The large numbers of these regions that went for Trump in 2016 and even in 2020 were motivated by his emphasis on revitalizing American manufacturing.
Economic analysts warned that an extremely high tariff would have tremendous penalties, causing consumer prices to go up and risk a trade war with Mexico. Yet, Trump’s rhetoric suggests his protectionist trade positions remain a hallmark of his campaign as he pushes toward the 2024 Republican nomination.
In light of the specter of tariffs, this combination will be of interest to not only John Deere but also political observers as it reveals how things may unfold in months to come.
