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“If I win, John Deere is going to be paying 200 percent,” presidential candidate Donald Trump announced during a campaign stop in Pennsylvania on Monday. While Trump currently trails Vice President Kamala Harris in polls by a narrow margin, threatening American farmers with increased costs and an iconic American brand with the highest import tariff in American history might not be helpful to his campaign. While he was on that train of thought, seemingly inspired by the giant green tractors behind him, Trump also lobbed the threat at American automakers.
“We’re going to put big tariffs on those cars that are coming in here at 100 to 200 percent, and they’re no longer going to be competitive,” he said, “so you better stay in Michigan.”
In addition, these tariffs would be a decision in flagrant opposition to the United-States-Mexico-Canada Agreement, a free trade pact between North and Central American countries, which Donald Trump himself signed when he was president in 2019. Mexico is the largest single country trade partner with the United States, and Donald Trump seems intent on pissing off our southern neighbors.
American brands have been building cars in Mexico since the 1930s, and some of the most popular vehicles in the U.S. are built in the nation that shares our southern border. Chevrolet and GMC medium and heavy-duty pickups are built there, for example. As are Ford’s Mustang Mach-E, and a variety of Ram and Jeep models. The Mexican auto industry is thriving, and many of those vehicles are sent to U.S. consumers.
John Deere announced in June that it was planning to move production of its skid steer loaders and compact track loaders from Dubuque, Iowa to Ramos, Mexico by 2026, and has committed to purchasing land and building a facility there to accomplish this. The end goal of this move is to make its compact “construction and forestry” product lines more price competitive with the global market. While the move may involve layoffs at the Dubuque facility, John Deere hopes to reassign the majority of its workers to the larger and more profitable large-frame backhoes, crawler loaders, and knuckleboom loaders built in Dubuque.
A John Deere spokesperson told CNBC that the company was continuing to invest in its American factories and workers. “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.”
