Investment Follows Opportunity, Not Politics

When Politics Meets Production:  Tariffs & Global Trade Tensions

When political pressure collides with commercial logic, opportunity usually wins. This is a fascinating story I have been following out of America for several months. John Deere’s new $55m factory in Mexico has sparked political backlash - but it highlights a global trend: investment follows opportunity, not politics.

That’s the clear takeaway from John Deere’s recent decision to go ahead with a US$55 million investment in a new factory in Nuevo Leon, Mexico — despite public threats of a 200% tariff from then-presidential candidate Donald Trump. His warning came after Deere’s June 2024 announcement to expand operations outside the US, which he claimed would cost American jobs.

In reality, Deere’s move isn’t about leaving the US, it’s about accessing growth. The company’s CEO, John May, reiterated Deere’s strong US manufacturing footprint, pointing out that only 5% of its US sales come from Mexico. The new factory will serve growing demand across Central and South America and take advantage of Mexico’s competitive labour costs. Commercial logic, not political pressure, is driving the decision.

This Isn’t an Isolated Case

Around the world, governments are trying to lure manufacturing investment with subsidies, grants and policy promises. But commercial incentives continue to trump political ones:

• Intel, offered €9.9 billion by Germany to build a semiconductor factory in Magdeburg, walked away. Instead, it opted for the US — where financial incentives and future defence contracts offered more upside.

• BASF, the world’s largest chemical company, is cutting back in Germany despite political promises to retain local manufacturing. It’s choosing to expand in Zhanjiang, China — again, chasing market access and operational cost advantages.

These examples speak to a broader truth: business investment follows opportunity. Lower costs, rising demand, and access to key markets consistently outweigh political grandstanding or even generous incentives — if the commercial case doesn’t stack up.

When Narrative Meets Reality

While some politicians may claim they can force companies to keep jobs onshore, the facts don’t always back them up. Trump’s story about Deere cancelling its Mexican factory under pressure was proven false by Deere itself. The investment is going ahead.

The bigger story here isn’t about politics — it’s about pragmatism. Businesses will always go where they can best serve their customers, run efficiently, and grow sustainably. And that often means going where the real opportunity lies, regardless of the political rhetoric.

This is a discussion that is inspiring content discussions like this one from Auto Edge on YouTube:

▶️ BREAKING! John Deere SHUTS DOWN Production In US And Trumps Reaction Says It All

Cheers,

John