Cummins boss slams US trade war

Cummins boss slams US trade war

  • October 11, 2018
  • Rematec
  • Business operations

The boss of US engine maker and remanufacturer Cummins has slammed US president Donald Trump’s introduction of tariffs on Chinese goods. Tom Linebarger, chairman and chief executive of Cummins, used a New York Times opinion piece to say: “American workers and their families will be the real casualties of a trade war.” Tariffs on the import of goods such as aluminium and steel – and potential retaliatory tariffs on US exports – would have a serious impact on companies like Cummins, Linebarger wrote. He used the example of Cummins engine plant in Seymour, a small town in Indiana, from which “nearly 80% of the products that Cummins makes” are exported.

“Increased supply-chain costs because of the recent tariffs will raise the price of the products from Seymour,” Linebarger says. “We may also face retaliatory tariffs, which could result in lost sales and restrict or reverse our growth.”

More than 20% of the 25,000 Cummins jobs in America “are directly tied to international business”. Extra costs will also hit the company’s suppliers. “Our supply chain, which has been developed and optimised over decades, cannot be reorganised in short order,”

Even an imperfect trade deal — one that gets companies closer to a level playing field “is better than no trade deal, and no trade deal is better than implementing tariffs”, he concludes. “We should work openly and transparently with the Chinese government and American businesses. Unilateral and escalating tariffs are not the answer.”

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