Unilateral Tariffs Put Cummins In Difficult Position

You might have noticed Cummins referenced in the news recently, in articles in which I emphasize both the importance of trade to our continued success and the impact of tariffs on our business. This is intentional, and part of a strategy and work that has been happening across the company for several years now. It has escalated in the past few months given all that is happening around the world on this issue, and I want to share with you what we are doing and why we are doing it.

First, I’m vocal about trade issues and spend a lot of time advocating for open and fair trade agreements because trade has been the single most significant contributor to growth for Cummins for more than a decade. That growth allows us to attract and retain our greatest asset, our world-class employees, while also improving the communities in which we live and work.

Not only does trade benefit Cummins, but the hundreds of businesses we work with and supply us critical parts and services. It’s all interconnected, and in a trade war, there are no winners, only losers.

Second, for our company to continue to be successful, we must be able to access global consumers with high-quality and competitively-priced products. Just five percent of the world’s consumers live in the U.S., and that number is decreasing. Half of our business is outside of the U.S., and if our ability to ship globally is impaired, it impacts our business across the board.

There is definite room for improvement in our international trade agreements. However, the unilateral tariff approach is not the right solution. A tariff is a tax — plain and simple. For Cummins, the impact of tariffs on steel and aluminum, the tariffs applied to products we bring to the U.S., as well as retaliatory tariffs imposed on products we export to other countries, put us in a difficult position. Even putting up short-term barriers with trading partners in China and Europe can cause long-term losses in market share.

I want to reassure you that we are working across all of our operating segments to understand the effect of the tariffs and identify ways to mitigate the impact to our workers and customers in every country and community in which we operate.

Tom Linebarger is the chairman and chief executive of Cummins. Cummins Inc.’s Jamestown Engine Plant employs more than 1,700 people.