Demand for Deere & Co. equipment from U.S. farmers is holding steady despite their concerns about overseas sales lost to President Trump’s global trade war, executives said Friday.
Sales in the agriculture and turf business rose 18 percent to $6.29 billion in the three months through July, driving companywide revenue to $10.3 billion, the Moline, Ill.-based manufacturer said in a statement.
[Also read: Senate Republican plans another move to rein in Trump tariffs]
“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 in a statement. The figures indicate that concerns over China’s early tariffs on U.S. crops like soybeans, imposed in retaliation for Trump’s 25 percent duties on $34 billion in Chinese goods and threats of levies on as much as $416 billion more, have yet to affect purchasing decisions.
“Uncertainty surrounding the trade market may have distracted” from relatively strong North American farm economics and the potential for demand to increase next year,” Chief Financial Officer Raj Kalathur told investors on an earnings call.
Still, farmers and their representatives in Congress have cautioned that Trump’s protectionist policies, intended to level the playing field for U.S. companies, may damage or destroy markets that took decades to build. Earlier this summer, the administration responded with $12 billion in emergency aid to help farmers cope. The aid will be provided through the Agriculture Department’s Commodity Credit Corp.
“This is a short-term solution to allow President Trump time to work on long-term trade deals to benefit agriculture and the entire U.S. economy,” Agriculture Secretary Sonny Perdue said at the time. Farmers have thus far taken the brunt of the fallout from Trump’s campaign, he conceded,
The timetable and mechanics of the program aren’t yet clear to Deere’s customers, executives said Friday, so its effects on demand are difficult to gauge.
[Related: Overwhelming majority of Republicans support Trump’s emergency aid for farmers: Poll]
