The effects of Donald Trump’s policies on John Deere are primarily driven by trade tariffs, which increase manufacturing costs, and by retaliatory tariffs from other countries, which reduce demand from its agricultural customer base.
Impact on John Deere. Higher costs from tariffs: During his first term and through 2025
Trump administration has imposed tariffs on imported raw materials like steel and aluminum. These higher costs have negatively impacted John Deere, with the company forecasting a $600 million loss due to tariffs in 2025.
Reduced farm equipment sales: The tariffs have contributed to lower commodity prices for U.S. farmers, especially from retaliatory tariffs imposed by China on agricultural products like soybeans. This reduces farmers’ income, making them hesitant to make expensive capital purchases, such as new tractors.
Production uncertainty: Trump’s proposed tariffs have created significant uncertainty for John Deere’s production strategy.
In 2024, Trump threatened a 200% tariff on John Deere’s products if the company moved manufacturing to Mexico, a plan the company ultimately did not reverse despite Trump’s claims.
According to a former trade official, such policies could make the company less competitive globally and result in fewer sales, revenue, and employees.
Stock market volatility: Trump’s tariff threats against John Deere have caused fluctuations in the company’s stock price. In September 2024, shares dropped by over 1.5% in after-hours trading following Trump’s comments on the Mexico production move.
Impact on farmers and the agricultural market
Since John Deere’s sales depend heavily on the financial health of farmers, Trump’s agricultural policies have an indirect but significant effect on the company.
Trade wars and retaliatory tariffs: Trump's trade policies have led to reduced overseas demand for U.S. agricultural exports. During the trade war with China, Chinese importers canceled large shipments of products like soybeans, forcing the U.S. government to provide billions of dollars in bailouts to struggling farmers.
Agricultural aid: To mitigate the effects of trade wars, Trump's administration has authorized billions in aid for farmers affected by tariffs, funded by the tariffs collected. However, some critics argue this aid primarily benefited the largest farms, leaving smaller and medium-sized farms to struggle.
Program cancellations: In early 2025, the Trump administration canceled several programs designed to support small and mid-sized producers, including those focused on local food systems and climate resiliency. This created greater risk for many farms and their customers.
Uncertainty about farm policy: Trump's administration has introduced uncertainty regarding the future of farm policy, with questions surrounding large-scale exports to China, the future of farm subsidies, and the price of steel. This uncertainty makes farmers more cautious with their purchasing decisions.