Tariffs put political squeeze on Greg Pence as Cummins strongly opposes them

WASHINGTON — The top executive of engine maker Cummins has one description for the tariffs the United States has imposed on steel, aluminum and other imports.

"Let's be clear: a tariff is a tax, plain and simple," CEO Tom Linebarger wrote in an opinion piece published in The New York Times Wednesday.

Greg Pence, the Republican favored to win the congressional district that’s home to the multi-national Cummins, has a different view.

"Tariff, tare-iffic? Is that what the new word is for today?" Pence said when telling a reporter Thursday that he's optimistic the trade tumult will end well.

He told IndyStar in a statement Friday that he understands the needs of the business community and has "full confidence in the president."

"I support the president's efforts to renegotiate America's trade deals, hold bad actors accountable and put American workers first," Pence said. "Under President Trump, the U.S. economy just experienced one of its strongest quarters in years, unemployment is at record lows and global trading partners are coming to the table."

Pence lives in Columbus, the most export dependent metropolitan area in the country and the home base for Cummins, one of Indiana's Fortune 500 companies.

But he’s in an even tighter spot than most Republicans on the issue of trade.

President Donald Trump has Republicans trying to defend protectionist trade policies the party has long opposed. Republican candidates are wary of challenging the president, who is very popular with their base. And speaking out against the tariffs would be extra difficult for Pence, whose brother Mike, is the vice president.

So Greg Pence appears to be echoing the White House position that any short-term pain for the economy will be made up after the tariffs are used as leverage to negotiate better trade deals.

"We're seeing progress there as far as what the president has got done," Greg Pence told WRBI radio in an interview at the Ripley County 4-H Fair. "I'm very patient and I'm very hopeful that the president is going to do the right thing for the American people."

The issue heated up this week when Trump announced Tuesday he’s directing $12 billion to farmers whose harvests have been hurt by retaliatory tariffs.

"American farmers would effectively be put on the government dole (at the expense of the taxpayer) to the tune of nearly $12 billion," Bill Hoagland, who grew up on a farm in Indiana and was a top congressional GOP aide on budget issues, wrote in an opinion piece published Friday. "They do not want government welfare payments.".

On Wednesday, Trump said he and European Commission President Jean-Claude Juncker have agreed to work on a deal "toward zero tariffs, zero non-tariff barriers and zero subsidies on non-auto industrial goods."

Trump took those steps as the White House has come under increasing pressure from the business and agriculture community to stop the escalating trade war.

"It's time to end this fight before too many people suffer unintended consequences," Indiana Chamber of Commerce President Kevin Brinegar said this month.

Brent Bible, an Indiana soybean farmer, stars in one of the ads that the group "Farmers for Free Trade" has been running to highlight the effects of the tariffs.

The Washington Post traveled to Columbus for a recent story on the hit the vice president's home town is taking because of the importance of the global market to Cummins and other local manufacturers.

In addition to telling The Washington Post that he's "very worried," Linebarger penned an opinion piece for The New York Times laying out the case against tariffs.

"We see no upside in the implementation of tariffs," he wrote. "They are a tax, and the risky proposition of entering a trade war could slow down the economy."

The next day, Indiana Sen. Todd Young told Secretary of State Mike Pompeo that he doesn’t know what the nation’s trade policy is.

“I don’t have as much clarity with respect to our trade strategy, as I’d like to,” Young said at a congressional hearing.

Pompeo said Trump’s goal is to eventually get rid of all tariffs and subsidies throughout the world.

“And he is confident that when we get there, America will out-compete the rest of the world,” he told Young.

As the top steel producing state, Indiana’s steel and aluminum producers benefit from the steel and aluminum tariffs imposed by the U.S.  But Indiana is also the most manufacturing intensive state, a leading producer of automobile and truck parts that rely on cheap steel and aluminum. And the Chinese imposed tariffs on U.S. crops in retaliation.

Pence noted the complexity of the issue in his interview with WRBI.

“We can separate steel from commodities. They’re two very different things,” Pence said.

He said Trump is trying to help out farmers, but added tariffs aren’t the only thing affecting crop prices.

“Having traded commodities in my life, there’s a lot that goes on, particularly at this time of year, affecting price,” he said.

Soybean prices have dropped both because of tariffs and strong crop yields.

But Ball State economist Michael Hicks who is tracking the tariffs recently wrote that he was surprised how quickly farmers have been affected by the trade fight.

"The growing effects of the trade war are going to be longer, deeper and more broadly painful than I’d expected," he said.

Contact Maureen Groppe at mgroppe@gannett.com. Follow her on Twitter: @mgroppe.

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