Trade war costs overpower tax-cut gains at Cummins. Consumers may be next
by James Langford | June 16, 2019 12:00 AM

At enginemaker Cummins Inc., the costs of President Trump's trade war have already topped savings from sweeping corporate tax cuts enacted by a Republican Congress at the end of 2017. ... And the Columbus, Ind.-based manufacturer isn't alone, says CEO Tom Linebarger, who has heard similar reports from the heads of other companies in his role as chairman of the Business Roundtable's trade committee.

"Our taxes are essentially higher now than they were before tax reform, because of the Chinese tariffs," Linebarger told reporters this week, confirming warnings from economists and businesses as long as a year ago that the White House risked negating one of Trump's signature accomplishments by waging a trade war with shipping duties.

The 25% levies on Chinese imports, which Trump imposed to force Beijing into giving U.S. companies broader access to its markets while halting appropriation of American technology, now cover $250 billion worth of goods. The White House has threatened to tack them onto the remaining $325 billion in merchandise the U.S. imports from China, too, compounding the economic fallout of duties on steel, aluminum, solar panels, and washing machines.

Despite pleas from farmers, retailers, and small businesses who said the trade tactics were eating into and sometimes wiping out profits, Trump maintains tariffs are an invaluable tool in forcing both trading partners and competitors to treat the U.S. fairly.
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