Report: Lafayette, Other Hoosier Cities Among Nation's Most At Risk In Trade War

Feb 9, 2017

A new report says some Indiana cities could be among the most impacted in the country by a potential trade war.

The Brookings Institution says Columbus is just more than 50 percent dependent on exports – more than any other metro area in the country. Elkhart, Kokomo and Lafayette are also in the top 10.

Indiana Fiscal Policy Institute director John Ketzenberger says these small cities’ economies all have one thing in common.

“They’re manufacturing hard goods,” he says. “We’re talking about parts for cars, or cars, or big motors, that kind of thing.”

In a trade war, the U.S. and a country like China or Mexico would retaliate against each other with escalating tariffs and other policies.

Ketzenberger says that would have a ripple effect on all countries that trade globally, and on the communities and companies that make the goods they trade.

He gives Cummins, a huge global engine-maker headquartered in Columbus, as an example. Ketzenberger says a trade war would hurt its revenues and cause it to shed jobs.

More than 5,000 jobs in Columbus are directly tied to exports, with another 15,000 are indirectly affected, according to the Brookings report.

“You start to lose some of those jobs and it can have a devastating effect on the local economy in hurry,” Ketzenberger says. “And it probably wouldn’t be long before it’d be felt across the state.”

Cummins also makes Columbus one of the nation’s top per-capita users of visas for foreign skilled workers – the kind of visas that have come under fire from President Donald Trump.