Cummins CEO hopes 90-day trade truce with China helps end ‘tariffs and carpet bombing’

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Market Watch  /  December 6, 2018

The CEO of engine maker Cummins, which gets 10% of its revenue from China, revealed on Thursday his hopes and fears about the U.S.-China trade truce.

The two countries have agreed to a 90-day cease-fire on new tariffs to allow negotiations to take place.

When asked about how the Trump administration should approach this 90-day period, Chief Executive Tom Linebarger responded: “We should be thinking about pragmatic market access.”

“What can we do to increase practical market access for American businesses in China, and what can we get [China] to practically stop doing, as just unfair practices?” he said.

He added: “What steps would they take in the next, say, 90, 180 days that we could consider good enough that we could go from tariffs and carpet bombing to negotiations? Because I think as soon as we’re into negotiations and engagement, the chances for win-win solutions go up. The more we’re into tariffs and carpet bombing, the more likely we don’t get anywhere.”

His comments came Thursday during a panel discussion about China at a summit on innovation in Washington, D.C. The event was sponsored by the Business Roundtable, a lobbying group that represents CEOs of large U.S. companies SPX, +0.44%  .

The U.S. side should be clear on its goals, Linebarger emphasized.

“What progress do we want, what’s good enough and does it get more market access and solve some of the really key problems we have,” the Cummins CMI, +1.77% boss said. “I hope we have clarity on our team about that. I think that’s what we should be aiming for.”

Linebarger previously has spoken out against recent tariffs, noting that Cummins has had to deal with paying a levy to import certain engines from its plants in China.

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Though he might very well think he is an expert on the subject, Linebarger appears clueless about the real China.