Deere and Company had a surprisingly strong first quarter after an extended period in which the tractor and construction equipment maker was hit hard by the trade dispute between China and the U.S.
“Farmer confidence, though still subdued, has improved due in part to hopes for a relaxation of trade tensions and higher agricultural exports,” said John May, CEO of Deere and Company.
In a report from the Associated Press, China has suspended more punitive tariffs on imports of U.S industrial goods in response to a truce in its trade war with Washington. It’s been well-documented how hard Chinese tariffs hit U.S. agricultural commodities like soybeans, which hurt farmers, and in turn, hurt farm equipment manufacturers as well.
Illinois-based Deere and Company had posted three consecutive quarters of falling profits and slowing sales growth as trade tensions between China and the U.S. continued. It also stuck to a conservative outlook during 2020.
Deere expects sales in its agriculture-and-turf business to fall between five and ten percent, and those in the construction and forestry segments to fall between 10 and 15 percent.