Former President Donald Trump on Monday vowed to impose a 200% tariff on John Deere’s imports into the U.S. if the company moves some of its production to Mexico.
John Deere announced earlier this year that it would lay off about 600 employees at three plants effective Aug. 30 as part of a plan to move production of skid steer loaders and compact track loaders to an existing facility in Mexico by the end of 2026. The layoffs impacted facilities in Davenport and Dubuque, Iowa, as well as East Moline, Illinois.
“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 a rally in western Pennsylvania. “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.”
Trump has previously said he would hit automakers that move production to Mexico with a 200% tariff, though this appears to be the first time he has extended that threat to an agricultural equipment manufacturer.
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John Deere explained the decision to shift some production to Mexico as “optimizing our factories for future products, making our operations more efficient and taking advantage of locations in the U.S. and globally, with a growing labor force.”
The company recently noted that it has invested more than $2 billion in its U.S. factories since 2019, including a new X9 combine assembly line in East Moline, as well as a new See & Spray line in Des Moines, Iowa, new tractor line assemblies in Waterloo, Iowa, and a new excavator factory in Kernersville, North Carolina.
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“In order to position our U.S. factories to undertake these highly value-additive activities it is sometimes necessary to move less complex operations, such as cab assembly, to other locations,” John Deere said in a post explaining its investments in U.S. manufacturing.
“This includes moving the production of some models of our skid steer loaders and compact loaders to our factory in Mexico, a facility that has been an important part of our global operation for nearly 70 years,” the company added.
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John Deere has faced some economic headwinds in the last year as high interest rates and lower commodity prices resulted in forecasts suggesting farmer net income will decline 24% in 2024.
Those challenges have led farmers to delay purchases of new equipment, prompting John Deere to scale back production and optimize its operations to meet current market demands.
Reuters contributed to this report.
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