Trump threat to cancel NAFTA threatens the heartland of American industry
Paul Haber, W5 Producer
Published Friday, November 17, 2017 12:05PM EST
As one of the most dependent exporting cities in America, Columbus, Indiana relies heavily on trade between Canada and Mexico.
Nervetheless, its residents voted overwhelmingly for Donald Trump’s protectionist agenda and the call to cancel NAFTA, the free trade agreement between Canada, the United States and Mexico.
The votes for Trump may be in part due to the fact Columbus is also the hometown of Vice President Mike Pence.
It is where he was born and raised. His brother still lives and works in this community of about 45,000 people.
At the heart of this town is one of America’s biggest engine makers, Cummins Inc.
The company builds diesel engines for the popular Dodge Ram pick-up truck using parts that are sourced from all over North America.
Currently, those component parts are able to cross the borders duty free. That, in turn, keeps costs low.
Cummins is able to remain competitive and keep jobs in the United States largely because of free trade between the three countries.
It has taken the company years to build sustainable supply chains across North America that may be undone with the stroke of a pen, should Donald Trump and Mike Pence decide to cancel NAFTA.
That decision would have a severe impact on the ability of Cummins to make engines at a competitive price in a market with stiff international competition.
Tom Linebarger, the CEO of Cummins, told W5 that “raising prices likely yields us lower market share and lower volume which means we have fewer jobs” at the Cummins plant in Indiana.
So, ironically, if NAFTA were to be terminated the effect on Vice President Mike Pence’s home town would likely be devastating.
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