John Deere is laying off hundreds of U.S. workers and shifting some production to Mexico, sparking political backlash and raising alarm over the future of domestic manufacturing.
At a Glance
- John Deere will lay off 610 workers in Iowa and Illinois by August 30.
- Production of select equipment is moving to Mexico by 2026.
- The company cites lower demand and higher costs for the move.
- Trump has threatened a 200% tariff on Deere imports from Mexico.
- Experts warn such tariffs could breach USMCA and raise consumer costs.
Strategic Shift and Economic Pressures
John Deere announced it will cut 610 jobs at plants in Iowa and Illinois, citing declining demand for agricultural equipment. The layoffs, which affect workers in Dubuque, Davenport, and East Moline, are set to take effect by August 30. The company plans to shift some operations to a new manufacturing site in Ramos, Mexico, by 2026, part of a cost-saving strategy amid tightening farm budgets, according to KSBW.
The move comes as U.S. agriculture faces a 27% drop in net farm income, following record highs just two years ago. Axios attributes the slump to falling commodity prices and higher interest rates, prompting farmers to delay equipment upgrades. John Deere, which reported $10 billion in net income last year, expects a drop to $7 billion in 2024 due to these market forces.
Watch a report: John Deere SHUTS DOWN Production In US.
Political Backlash and Tariff Threats
The decision has drawn immediate criticism from former President Donald Trump, who threatened a 200% tariff on Deere equipment made in Mexico. Speaking at a rally in Pennsylvania, Trump accused the company of betraying American workers.
Trade analysts quickly pushed back. A Business Insider report noted such tariffs would likely violate the USMCA and could trigger retaliatory measures. Billionaire investor Mark Cuban labeled Trump’s plan “insane,” warning that it would damage an iconic American brand while inflating prices for U.S. consumers.
Deere’s Justification and Future Outlook
Deere says the production shift is a strategic business decision designed to boost efficiency, not a wholesale exit from U.S. manufacturing. In a statement to The Gazette, the company emphasized that more than 75% of its domestic sales are still fulfilled by U.S.-made equipment.
Still, the company’s restructuring underscores a deeper trend: American manufacturers are increasingly adapting their operations to cope with volatile markets and rising global competition. Whether that adaptation leads to long-term resilience or political fallout remains to be seen.
