Defying predictions that President Donald Trump’s stand on trade would impact its bottom line, Deere & Co. executives announced that sales of John Deere farm equipment — one of America’s most iconic brands — have actually increased.
Sales rose 18 percent to $6.29 billion in the three months through July, the company said in a statement, according to the Washington Examiner.
That comes despite doom and gloom from analysts who predicted the opposite.
“Although Deere has not provided estimates on an impact yet, we believe China’s retaliatory tariffs targeting U.S. agriculture will negatively impact Deere’s business,” CFRA Research analyst Elizabeth Vermillion predicted in June, Investor’s Business Daily reported.
On Friday, the company said business is business regardless of the global political scene.
“Replacement demand for large agricultural equipment is driving sales even in the face of tensions over global trade and other geopolitical issues,” Chief Executive Officer Samuel Allen said.
Chief Financial Officer Raj Kalathur told investors that “uncertainty surrounding the trade market may have distracted” from relatively strong North American farm economy, which has the potential to increase next year.
Agriculture Secretary Sonny Perdue said that he understood the concerns that have been voiced over Trump’s trade showdown, but he said that the results will prove that Trump has taken the right course.
Perdue said on Wednesday that the current trade tension was “a little bit like weight loss … it’s kind of painful to start with, but you’re healthier in the end,” Fox News reported.
A new round of 10 percent tariffs on about $200 billion worth of goods coming from China takes effect on Aug. 23. This follows tariffs Trump has slapped on Chinese and European goods. The president contends that government support for manufacturers undercuts American businesses, and wants that support ended to create a level playing field for American farmers and companies.
On Friday, CNBC reported that Chinese and American officials are negotiating to develop a solution to the trade tensions between the U.S. and China prior to the scheduled November meeting between Trump and Chinese President Xi Jinping.
Perdue said Trump’s aggressive trade policy seeks to redress a years-long imbalance.
“China has not been playing by the rules for years and we’ve allowed for them year after year to get away with that,” Perdue said. “And frankly, we’ve got barriers across the world, not just in China, but in the European Union. If we turned our farmers loose in America they would own the market internationally.”
Perdue emphasized that the tariffs are a means, not an end.
“President Trump is saying ‘enough is enough. If you want free trade let’s have fair trade,'” Perdue said. “And that’s the ultimate goal … to say — even to our friends like Mexico and Canada — (to) bring them to the table and say, ‘You know, it’s kind of tilted here, let’s level this playing field and allow our producers to compete competitively with yours and we’ll be fine.'”
Perdue said farmers know that this is a war America has to win.
“Farmers get that. They’re patriots. They understand when people don’t play by the rules,” he said. “We’ve been the Boy Scouts internationally on the trade area and we’ve played by the rules and President Trump is trying to make sure that in this game of international trade others play by the rules too.”
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