Presidential candidate Donald Trump made a bold statement during a campaign stop in Pennsylvania by threatening to impose a 200% tariff on John Deere. This threat was extended to American automakers as well, with Trump suggesting that big tariffs would be placed on cars coming into the country. This move could potentially harm American farmers and iconic American brands, such as John Deere.
If Trump were to follow through on these threats, it would go against the United-States-Mexico-Canada Agreement, a free trade pact that he himself signed during his presidency in 2019. Mexico is a significant trade partner with the United States, and imposing such high tariffs could strain relations with our southern neighbors.
American automakers have been producing vehicles in Mexico for decades, with popular models like Chevrolet and GMC pickups, Ford’s Mustang Mach-E, and various Ram and Jeep models being built there. The Mexican auto industry is thriving, and many of these vehicles are exported to the U.S. market.
John Deere recently announced plans to move production of its skid steer loaders and compact track loaders from Iowa to Mexico by 2026. This move is aimed at making its products more competitive globally. While this decision may result in layoffs at the Iowa facility, the company is looking to reassign workers to other, more profitable product lines built in the U.S.
Despite these changes, John Deere remains committed to investing in its American factories and workers. The company stated that in order to focus on more value-added activities in the U.S., they may need to move some operations to other locations. This strategic decision is part of John Deere’s efforts to remain competitive in the global market.
Overall, Trump’s threats of imposing high tariffs on American companies like John Deere and automakers could have wide-ranging consequences. From strained international relations to potential impacts on American workers, the implementation of such tariffs would undoubtedly have a significant ripple effect on the economy. It remains to be seen whether these threats will materialize or if they are simply part of a larger political strategy.
