Dependent on trade, Mike Pence’s hometown takes a hit due to Trump’s tariffs


COLUMBUS, Ind. — One company & one family loom large over this city, intertwined for decades. Cummins Inc. is the biggest employer in Columbus, built into a $20 billion heavy equipment manufacturer with the help of Mike Pence, who as governor passed pro-business tax cuts & made trade visits to China on its behalf…

But the alliance of the past is being threatened by the administration Mike Pence now serves, as President Trump’s trade war with multiple nations clobbers Cummins & other local companies.

According to the Brookings Inst, the Columbus area is the most export-reliant region in the country, with just over half of its economic output linked to foreign purchases.

“I’m very worried,” said Tom Linebarger, the chief executive of Cummins, who met with President Trump over dinner at the WH in January in a bid to dissuade him from introducing steel & aluminum tariffs or tearing up free trade agreements.

Linebarger, 55, warns of job losses ahead because thousands of jobs at Cummins & elsewhere in the area depend on trade…

Cummins plants produced the drill that powered the famous rescue of Chilean miners in 2010 & the emergency generator at the Statue of Liberty.

Now the aggressive pursuit of foreign trade that made this city a recession-busting economic miracle has made it decidedly vulnerable, with businesses already canceling projects & mulling the depth of job losses.

The Cummins plants…, epitomize how deeply international trade has become rooted in cities & towns throughout the nation. Cummins alone has 25,000 different suppliers & also its own chain of distribution, both of them largely international. Its U.S. base is bolstered by operations in the U.K., China & India.

Linebarger said the president’s trade war hits the company in two ways, affecting both its incoming parts, which will be subject to tariffs, & its own products, on which retaliatory penalties will be assessed by countries targeted by Trump.

For Cummins, the two most corrosive tariffs will be those assessed on steel & aluminum, which began July 1 & cover $48 billion of imports, & the proposed $351 billion of automobile & auto part imports. Both have been justified as necessary for national security…

“We almost put the factory in India. We evaluated the U.K. & China too. If we’d seen trade barriers at that point, we’d definitely have made a different decision,” says Linebarger.
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Other local businesses are seeing the effects as well. Harold Force, 67, has run a construction company founded by his father since 1980, which currently employs 250 people. Now he is coping with rising prices on items he needs for contracts signed in less expensive days before the trade war.

Already, he said, he has had to cancel plans to expand his workforce.
“I think this is a much bigger deal than people think. When it started, it was shock. I thought, ‘Is this really happening?’ Then one of our biggest projects in recent times was canceled because of steel prices,” he said. “It’s damaging in so many ways,” he said…

The city’s foreign companies are likewise worried. Jon Volz of Sunright America Inc., a Japanese-owned company in Columbus which supplies U.S. Toyota plants with millions of bolts & fasteners, said the materials required to make their parts are only available in Japan.

“It would take some time to produce our materials here. We fear Taiwan will swoop in and take the competition away from us,” he said.

Cummins has applied to the WH for an exemption from the tariffs. Three GOP House members in IN — Reps. Jim Banks, Susan Brooks & Jackie Walorski — joined more than a 100 House Republicans in expressing “deep concern” about tariffs in a letter to Trump in March…

Across Columbus, workers are expecting the worst.

“I’m very Republican, but I feel the current strategy is opinion-based, not data-based,” said Chris Tiemeier, 38, whose grandfather was also a proud Cummins employee & whose wife works at the plant. “The company has changed our town, it’s doubled in size. I’m worried about tariffs.”

“I’d like to say I’m optimistic. I’m an optimistic person, but there’s not a lot of optimism to be had,” added James McNeely, who is 40. “Most of our parts come from China. I think we’re gonna feel this trade war a whole lot faster than what people are saying. There’s a saying, ‘Trust God, everyone else bring data.’ I don’t think we’re doing that.”

Jason Hester of the Greater Columbus Economic Dev. Corp has traveled to China for the last nine years to whip up investment. This year, he’s canceled his travel plans.

“There’s nothing we’re going to decide, so what would be point be?” he asked.

Linebarger, the Cummins CEO, said he was heartened that he’d been able to deliver his message to Trump. But he’s not optimistic much will change.

“Our advice was not to do tariffs . . . but obviously it did not persuade,” he said. “Their view of what’s eventually good for our company differs to mine.

US soybean farmers hurting after China cancels contracts

Btw, I had to cut out interesting sections of this piece due to size of posts considerations, but it is worth going to the WaPo site to read if you arent blocked by a paywall.


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