In the Midwestern countryside, among the cornfields, are grain silos and farm equipment dealers—especially the shiny green machines made by John Deere, the company that symbolizes the partnership between agriculture and industry in America. But in July, the company announced that it would move some of its production from Dubuque, Iowa, to Ramos, in northern Mexico, by 2026.
But Donald Trump’s response was swift. Speaking on Tuesday, the Republican candidate threatened, “I’m going to put John Deere on notice right now. If you do that, we will put a 200 percent tariff on everything you want to sell into the United States.” Speaking from a farm in Smithton, Pennsylvania—a key state in the upcoming presidential campaign—Trump said in front of two of the company’s giant tractors, “Because it hurts our farmers. It hurts our industry.”
A week ago, Trump issued the same threat in Detroit, in the equally crucial state of Michigan, against existing American automakers that want to build in Mexico. “I will put a 200% tariff on them, which means they can’t be sold in the United States,” the Republican billionaire promised, repeating: “Tariffs are the greatest thing ever invented.”
Trump lowered that rate to 100% in an economic speech Tuesday in Savannah, Georgia, but the trend was clear: The second-term candidate intends to revive the trade war that began early in his presidency and was halted by Joe Biden, though the latter has retained most of the sanctions against China.
Trump's Last Thoughts
Donald Trump dreams of returning to the 19th century, when tariffs accounted for more than 90% of federal revenue until the Civil War (1861-65) and about half until the introduction of the income tax in 1913. His ambition is to eliminate the income tax entirely, which is unrealistic, given that tariffs now account for just 2% of federal revenue, compared with 49% of income taxes and 36% of Social Security contributions. The business magnate has nonetheless promised to impose tariffs of 10% to 20% on all imports into the United States and 60% on imports from China.
For Jason Furman, an economist at Harvard University in Massachusetts, this is “just a global trade war in the making.” The former Obama adviser told CNBC: “It’s something Donald Trump can do on his own without Congress.”
The Peterson Institute, a transatlantic think tank in Washington, takes this issue seriously. “Trump’s recent musings may be just that: musings. But his statements show that he is serious about shifting the revenue base from income to imports,” the institute said, highlighting the difference in scale. “His concrete tariff proposals announced so far would affect more than $3 trillion (€2.68 trillion) in trade, nearly 10 times the trade targeted in his trade war with China.”
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