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As U.S. farmers grapple with China trade war, Deere and Caterpillar cut jobs

Iowa farmers hit by bad weather & politics

The impact of China's move to greatly curb purchases of U.S. livestock and crops during the ongoing trade war with the U.S. is rippling beyond farmers into the broader agriculture-industrial complex. 

Deere & Co., the maker of combines, tractors and other farm equipment, is indefinitely laying off more than 160 workers in Illinois and Iowa as demand for its farm equipment shrinks, Reuters reported. About 50 of those were cut from the Harvester Works plant in East Moline, Illinois, and some 118 additional workers in Iowa will be laid off starting Nov. 18, according to notices required by the state.

Farmers are struggling both because of bad weather and China's retaliatory move to curtail, or entirely halt, purchases of soybeans, corn and other products in retaliation for tariffs President Donald Trump imposed starting last year. Under a preliminary deal currently under discussion, China would commit to buying between $40 billion and $50 billion a year in American farm products, according to U.S. trade officials. 

Experts are skeptical such a goal is achievable, however, and the two sides have yet to clinch a final agreement.

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While farmers anxiously await a formal trade deal, makers of farming equipment are trimming their workforces amid sales declines. Caterpillar, which also makes farm equipment, earlier this month laid off 120 workers in Texas, citing market conditions and the trade war.

"Orders have sunk so low that I am lucky to have a job," Devin Spencer, an employee at the Harvester Works plant, told Reuters this week. "What happens if we don't get orders? I am out of the door."

Deere in September downgraded its outlook for equipment sales for the year, citing "trade uncertainty" as a factor and weaker customer demand. Caterpillar in October also said it would cut equipment production because of diminished orders and lowered its outlook for 2019.

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