In the Midwest countryside, between corn fields, grain silos and agricultural equipment dealers, the greenery of John Deere stands out. It embodies the alliance between American agriculture and industry. However, it announced in July that it would move part of its production from Dubuque, Iowa, to Ramos, in northern Mexico, by 2026.
Donald Trump’s response was swift. “I’m warning John Deere right now: If you do this, we’ll put a 200% tax on everything you import into the United States.”threatened the Republican candidate, who spoke on Tuesday, September 24, from a farm, in front of two giant tractors of this company, in Smithton, Pennsylvania, a key state in the November presidential campaign. “It hurts our farmers, it hurts our industry”estimated.
A week earlier, he had launched the same threat in Detroit, in the equally decisive state of Michigan, against the historic American manufacturers who wanted to produce in Mexico. “We are going to impose a 200% customs tariff on them, which means that [leurs véhicules] will not be able to be sold in the United States,” promised the Republican billionaire, who repeated: “Tariffs are the best thing ever invented.”
He lowered that rate to 100% in an economic speech on Tuesday in Savannah, Georgia, but the direction is clear. The candidate for a second term intends to relaunch the trade war started at the beginning of his presidency and put on hold by Joe Biden, although the latter has maintained most of the sanctions against China.
“Trump’s final thoughts”
Donald Trump dreams of returning to the 19th centurymy century, when customs duties accounted for more than 90% of federal government revenue until the Civil War, and about half until the introduction of income tax (IR) in 1913. His ambition, precisely, is to eliminate the latter. This is illusory: customs duties represent 2% of federal revenue, compared with 49% of income tax and 36% of Social Security contributions (pay-as-you-go pensions). Yet Donald Trump has promised to tax all imports into the United States by 10% to 20% and those from China by 60%.
For Jason Furman, an economist at Harvard University (Massachusetts), it is “just a generalized trade war brewing” : “This is something Donald Trump could do alone, without Congress.” declared the former adviser to Barack Obama, on the CNBC channel.
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