Greetings Columbus —
Exchanges with my husband during the day are rare. He’s busy. I’m busy. We’ve got stuff to do.
If we do trade brief texts or emails, it’s usually goes like this —
Him: Stopping at Kroger after work. Need anything?
Me: Orange juice. Cereal. Bottled water. Thanks.
Yep, our diet is as bland as our occasional work-day banter.
On Thursday, the email I got from my wealth manager-financial planner spouse indicated he wasn’t stopping at the grocery store. Instead, a better destination might have been the liquor store.
His e-mail said this: He started a trade war. Market down 400 to 500. I love my job!
Last night, it was much the same as I walked in the door. There was no “Hi babe, how was your day.”
“Gary Cohn resigned,” was the greeting.
Cohn is the president’s top economic adviser, and he came out on the losing end of the tariff battle. Batten down the hatches because we’ll be in for a wild ride on Wall Street today. Dow futures were down, and it was a sleepless night in my household.
While it’s not always a given that what happens on Wall Street translates to Main Street (you and me), in the tariff fight what is bad for Wall Street just might be bad for Main Street.
Slap tariffs of 25 percent on imported steel and 10 percent on aluminum and we are likely to pay more for a wide range of products. And the rest of the world is giving big hints about how it would retaliate: Levis, bourbon, Harley-Davidson motorcycles, peanut butter and orange juice.
Then there is Columbus.
More than a year ago, this was a lead on a story we wrote —
Columbus is the American community with the most to lose should President Donald Trump go forward with promises to rip up trade agreements and impose tariffs on goods from other countries, according to a research group.
Exports comprise 50.6 percentage of Columbus’ gross domestic product. Cummins plays a big role in driving that number.
Back in January 2017, Jason Hester, president of the Columbus Economic Development Corp., explained it this way:
“If, hypothetically, a trade war commences –- that is, if the U.S. increases tariffs on inbound goods and other countries were to do the same to our exported goods — then our local economy would likely be hurt because of our dependence on exported goods and services,” Hester said.
He offered a scenario of the negative impact of a trade war.
A product that is manufactured in the U.S. for export could be hit with a tariff by the destination country. As a result, the foreign customers would have to pay more for the U.S.-made product, thus reducing demand. To keep the customers, the U.S. company would either need to lower costs to compete — such as paying workers less or other cuts — or possibly choose to open manufacturing operations in the destination country for the purpose of serving those global markets.
If you have been paying attention since last week, you will have noticed that Cummins has been mentioned in national stories about the tariffs and stock market gyrations.
From last week on CNBC.com: Shares of Ford Motor dropped 3 percent and General Motors fell nearly 4 percent. Boeing, Cummins, Johnson Controls and United Technologies — other users of steel and aluminum — also helped lead the market lower.
Automotive Fleet reported:
Engine manufacturer Cummins was reserved in its response to the proposed tariffs in a statement saying, “We won’t know the full impact until the final rule is issued.” The company referred to statements that it had previously made independently and in conjunction with the organization Business Roundtable, where the company voiced its concerns that such actions will hurt American businesses, workers and consumers.
The Business Roundtable is a politically conservative association of chief executive officers who lead U.S. companies and the organization came out in opposition to the President’s plan.
And Cummins was even mentioned in the Wall Street Journal editorial calling the proposed tariffs a folly and blunder. Here are excerpts from the editorial:
- This tax increase will punish American workers, invite retaliation that will harm U.S. exports, divide his political coalition at home, anger allies abroad, and undermine his tax and regulatory reforms.
- The National Retail Federation called the tariffs a “tax on American families,” who will pay higher prices for canned goods and even beer in aluminum cans. Another name for this is the Trump voter tax.
- The economic damage will quickly compound because other countries can and will retaliate against U.S. exports. Not steel, but against farm goods, Harley-Davidson motorcycles, Cummins engines, John Deere tractors, and much more.
Many are hoping the president opts for a more surgical imposition of the tariffs, including exempting some countries.
But until he better defines his plan, you might want to avoid looking at your 401K numbers today. Remember: Think long-term.
Here’s what else you need to know —
How many gun permits are held by Bartholomew County residents?
Statewide, about 1 in 6 adult Hoosiers now have a handgun permit — up from 1 in 10 in 2012, according to Indiana State Police statistics. Permits have skyrocketed for women in Indiana. All the details here.
Dynamic gymnastics duo — one from North, one from East.
We’ll be in Muncie on Saturday to track the achievements of Adi Minor and Claire Thompson at the state gymnastics finals. Read how Minor and Thompson are approaching the competition.
Motorists be warned: Accidents this morning on Interstate 65.
Police are working two accidents near the Edinburgh exit. All the details here.
It’s a go: Making the riverfront a destination.
The Columbus City Council has approved spending money to create a development plan for the riverfront. A preliminary plan calls for several overlooks of the East Fork White River downtown, connections to the People Trail system and an in-water recreation park. Thursday’s Republic.
What’s in Thursday’s Republic …
Not going to Florida on spring break? We’ll tell you how to keep your kids out of mischief … United Way campaign hits $4.15 million in giving … winter farmers market ending early.
Have a great day. Send your story ideas to firstname.lastname@example.org.