One of the biggest U.S. tractor companies has decided to drop China as a product supplier. Bloomberg says that should be good news for the Trump Administration, but AGCO Corporation is turning to Brazil to replace those products.
The reason is the company wants to avoid the 25 percent U.S. tariffs on Chinese imports. AGCO Chief Executive Martin Richenhagen expects that tractor exports will grow to a total of 4,000-to-5,000 units next year.
Bloomberg says this is another unintended consequence of the trade war between China and the U.S. that has turned the global economy upside-down and put a damper on expectations.
AGCO, based in Duluth, Georgia, and its biggest rival Deere and Co., have both said there will be negative impacts from a trade war between the world’s two largest economies. AGCO is concerned about the trade war putting a lot of pressure on the nation’s farmers, while Deere and Co. stressed it supports and wants open markets and free trade.
AGCO’s tractor sales in Brazil could get a boost as China continues to move away from American soybeans and replaces them with Brazil soybeans.