Trump warns established American corporations of potential customs penalties.
Donald Trump's Fondness for Protectionist Policies
Protectionist measures have always been one of Donald Trump's preferred political strategies. Lately, he warned automakers within the U.S. about steep import duties if they relocate their manufacturing units overseas. Now, it's John Deere's turn in Trump's crosshairs.
During a farmer-oriented campaign event in Pennsylvania, Trump expressed his "love" for John Deere, American icons in agricultural machinery. But his affection turned into a stern warning when he learned of Deere & Company's plans to transfer a substantial chunk of its production to Mexico. Trump threatened, "I'm telling John Deere right now: If you do that, we're going to impose a 200 percent tariff on everything you sell in the United States."
John Deere has approximately 34,000 employees across its U.S. and Canadian facilities. The manufacturer, recognized for its tractors, has shed jobs at multiple plants over the past year and half. Recently, John Deere announced plans to outsource the manufacturing of small wheel loaders from its Iowa plant to Mexico. Union representatives have accused the management of prioritizing "greed" and aiming to improve profits at the expense of workers. In a response statement, Deere & Company justified its decision by stating that relocating simple production phases abroad helps retaining valuable jobs in U.S. plants.
Throughout his tenure from 2017 to 2021, Trump viewed tariffs as a means to safeguard or even bring back industrial jobs to the U.S. Recently, he also issued warnings to automakers about 200 percent import fees if they relocated production outside the U.S. to Mexico.
A Disastrous Strategy
Trump routinely claims that foreign manufacturers or countries will pay for the tariffs. At the Pennsylvanian event, he also underlined this would negatively impact "our farmers." However, farmers as buyers of tractors and agricultural machinery would ultimately bear the additional costs to maintain jobs in the U.S. or pay the tariffs. Tariffs are essentially taxes on imports, therefore making imported goods more expensive and less attractive, yet also resulting in higher prices for consumers.
Economists caution that unreasonably high tariff hikes could escalate inflation in the U.S. Entrepreneur and Democratic presidential candidate Kamala Harris's backer, Mark Cuban, referred to Trump's pledge as "a disastrous strategy to destroy a renowned American company and heighten expenses for American consumers." Cuban further emphasized on Twitter that Trump wanted to levy 200 percent tariffs on U.S. firms operating in Mexico, while import tariffs on China varied from 10 to 20 percent, thereby making Chinese products more affordable than certain U.S. companies' products in the U.S.
The US presidential election of 2024 could potentially see protectionist policies continuing to be a significant aspect, given Donald Trump's history of implementing tariffs to safeguard industrial jobs.
Despite Kamala Harris's entrepreneurial supporter, Mark Cuban, labeling Trump's pledge for high tariffs as "a disastrous strategy," some politicians may still advocate for such policies during the 2024 election.
