Former President Donald Trump threatened to hit U.S. farm machinery maker Deere & Co. with steep tariffs if the company moves production to Mexico during an event on American farmers and trade.
“I’m just notifying John Deere right now, if you do that, we’re putting a 200% tariff on everything that you want to sell into the United States,” Trump said Monday, citing reports about the company shifting manufacturing to Mexico.
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 U.S.
Deere shares fell more than 2% in after-market trading in New York before paring losses.
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 U.S. manufacturing with $2 billion invested in domestic plants since 2019.
Trump’s comments came at a forum in Pennsylvania focused on threats to U.S. growers, as he sought to rally support in the crucial battleground.
Trump’s trade proposals could be equivalent to a $3 trillion tax hike, warned Douglas Holtz-Eakin, president of the center-right think tank the American Action Forum.
“It’s enormously protectionist and terrible economic policy,” said Holtz-Eakin, who served as an economic adviser to former President George H.W. Bush and an adviser to the 2008 presidential campaign of GOP Sen. John McCain.
Trump has championed tariffs as a way to help working-class Americans by protecting workers from unfair trade practices and as a negotiating tactic to reach more favorable trade agreements. However, some experts fear they will do the opposite.
In addition to warning Deere, Trump accused China of failing to honor a deal to buy $50 billion in U.S. 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. “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’s call for a 20% across-the-board tariff combined with a 60% tariff on China would cost the typical middle-income household more than $2,600 a year, according to updated estimates published last month by the Peterson Institute for International Economics.
That’s up from the researchers’ previous estimate of $1,700, which was based on a 10% tariff.
Trump as president reached a so-called “phase one” trade deal with China in early 2020 that saw the U.S. reduce some duties in exchange for China pledging to increase its purchases of U.S. exports, including $50 billion of agricultural goods.
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.
