Columbus, the state of Indiana and the United States should continue to see economic growth in 2019, but the impact of tariffs and a trade war continues to loom large, economic experts said.
“Trade wars are never good for economic growth,” Catherine Bonser-Neal told the crowd during her financial markets forecast at the Indiana Business Outlook Panel on Wednesday morning at the Columbus Learning Center.
If current tariffs on imports and exports by the U.S., China, Mexico, Canada and the European Union continue, or more are added, current economic forecasts could change likely change for the worse, added Bonser-Neal, an associate professor of finance in Indiana University’s Kelley School of Business.
That is one concern for Columbus, said Steven Mohler, who presented the local economic forecast.
Columbus’ chain-weighted gross domestic product (GDP) — the monetary value of all the finished goods and services produced within the area, priced at last year’s prices — should increase 2 to 2.5 percent in 2019, said Mohler, visiting assistant professor of management at IUPUC.
But for a community such as Columbus that is dependent on manufacturing and Cummins, a global diesel engine and power company, tariffs on raw goods such as steel, and on imports and exports, cause concerns, he added.
China is a huge market for Cummins’ products, but if a trade deal cannot be worked out between the U.S. and China, it could have serious consequences for both, said Ryan Brewer, associate professor of finance at IUPUC.
“If we don’t get a deal it hurts both countries. China more than the U.S., but if they lose we lose. It’s a binary outcome,” Brewer said during his presentation of the state forecast.
For more on this story, see Thursday’s Republic.
