Large American company warns of layoffs if US-China trade war continues

World Today

One large American company is calling for an end to the tariffs. Cummins Inc. is a $20 billion company headquartered in the U.S. state of Indiana. Most of their goods are exported and they said they’ll be forced to lay workers off, if the dispute drags on too long.

CGTN’s Dan Williams visits one of the company’s factories.

The laborious and intricate process of assembling a huge engine at a Cummins Inc. factory. The finished product is a 95-liter engine that can power trains, stadiums and hospitals. This plant makes just ten of them a week. Of those, eight are exported.

But following the Trump administration’s decision to impose tariffs on imports from multiple nations, those countries imposed retaliatory tariffs, and companies like Cummins find themselves at the forefront of the trade dispute.

“We have to be clear on what a tariff is,” Jon Mills, director of External Communications for Cummins said. “A tariff is a tax plain and simple and that gets passed down to the consumer. Our ability to trade is critical to our success. It adds good American jobs here and allows us to be as strong as we can as a company.”

It’s not just tariffs on products Cummins exports that are an issue for company leaders. The tariffs on steel and aluminum imports into the U.S. have also raised costs. Although most of the company’s factories are located in the U.S, Cummins also has operations in places like India, Europe and China.

But each production line is specialized, so it is both difficult and costly to change the production flow and the supply chain. Given their international footprint, Cummins said they are well positioned to manage the short-term impact of these various tariffs. But in the long term, if these tariffs remain, the consequences could be more significant.

This plant in Seymour, Indiana employs around 3,000 people and Cummins has invested some $300 million into the plant over the last seven years. But the company is warning job losses are possible if the tariffs remain.

“We’ve had teams really looking at mitigation plans for a while now so there is a range of options being considered,” said Mills. “The longer it drags on, the longer the uncertainties. And it does to some degree stall out when you think about investment and growth. So we want again to get back to the negotiating table. Unilateral tariffs are not the way to achieve the goal. They end up hurting workers and farmers and businesses.”

Cummins posted record sales and profits for the last quarter. Workers should be feeling confident about the future. Instead, many are concerned about the impact of tariffs and the security of their jobs.