US Elections 2024: Donald Trump threatens 200% tariff on John Deere products if they move to Mexico; shares fall 1.5%

US Elections 2024: Former President Donald Trump, speaking to a gathering of farmers near Pittsburgh on Monday, September 23, said he would impose a 200% tariff on John Deere's imports into the US if the agricultural equipment manufacturer shifted production to Mexico, per Reuters.

The comments caused the company’s stock to drop, impacting its share price, the report added.

Earlier in the year, John Deere revealed plans to lay off hundreds of workers in the Midwest while expanding its production capacity in Mexico. The decision sparked discontent among employees and some political leaders.

“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 during the event 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," he said.

While Trump has previously threatened automakers with similar tariffs if they relocated production to Mexico, this marks the first time he has extended such a warning to an agricultural company.

John Deere’s shares fell more than 1.5 percent in after-hours trading following Trump's remarks after having closed up 0.75 percent. The company has not yet responded to requests for comment.

Trump, currently a Republican presidential candidate, emphasised the use of tariffs as a central component of his economic policy, aiming to protect American jobs. However, economists have raised concerns saying such measures could lead to higher inflation.

Trump also touched on trade relations with China. He vowed to pressure Chinese President Xi Jinping to fulfil a previous agreement to purchase $50 billion worth of US agricultural products.

Under the “Phase 1” trade deal signed during Trump’s presidency, the US agreed to reduce some tariffs on Chinese imports in exchange for promises from China to buy more American goods, including agricultural products. However, China’s actual purchases have fallen short of the agreed figure.

“Probably my first call—I’m going to call President Xi—I’m going to say you have to honor the deal you made. We made the deal, you buy $50 billion worth of American farm products, and I guarantee you, he will buy it, 100% he will buy it,” Trump stated.

Farmers and industrial workers remain a key part of Trump’s voter base, particularly in swing states like Pennsylvania, where polls show a close race against Democratic candidate Vice President Kamala Harris. Winning over these constituencies will be critical for Trump’s chances in the upcoming election on November 5.