Volatility in financial markets related to President Trump’s imposition of steel and aluminum tariffs has N.C. Treasurer Dale Folwell’s attention. Folwell says his department is monitoring the markets to see if the turmoil affects state investments.

At this point, he can’t say whether the tariffs, and concern over a potential full-blown trade war, might spook investors, reduce state tax revenues, or affect funding of the state pension and health plans for public employees and retirees. But he said North Carolina’s pension assets are secure, well funded by the General Assembly, and could be protected from a downturn by a robust Rainy Day Fund the legislature has beefed up.

“The president and his advisers are very concerned about the trade deficit of the United States, and they are attempting to the best of their ability to do something about it for the long term,” Folwell said Tuesday, April 3, during his monthly Ask Me Anything conference call with reporters.

“Generally speaking no one ever wins a war. That doesn’t mean wars aren’t fought, or wars aren’t talked about,” Folwell said. “My focus is not on what is being said, even though it does rattle the markets. I’m trying to focus on what’s actually being done.”

Trump has accused China of unfair trade practices and theft of U.S. intellectual property. He targeted the Asian nation with a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum. Previously Trump slapped tariffs on washing machines and solar energy cells.

China has retaliated by announcing tariffs on 128 U.S. goods and products. Those include pork, which North Carolina hog farmers export to China.

State and national agricultural leaders warned at the 13th Annual Agriculture Development forum in February about potential perils for North Carolina farmers as a result of Trump’s protectionist trade measures.

In another matter Folwell said the Council of State is expected to sign off on a $400 million installment of the Connect NC bond at the council’s April 10 meeting.

Source: Office of State Budget and Management

State budget director Charles Perusse provided Carolina Journal with a document breaking down where the money will go. It shows: Universities, 63 percent; community colleges, 17 percent; water and sewer, 11 percent; agriculture, 7 percent; and 1 percent each to public safety, parks, and the N.C. Zoo.

The General Assembly passed the $2 billion Connect NC Bond Act in 2015, and voters approved it in a March 2016 ballot referendum. The bond is designed to pay for projects for universities, community colleges, public safety, state and local parks, the N.C. Zoo, and agriculture. Money from the bond is expected to be distributed through the 2022-23 fiscal year.

To date one $200 million installment has been issued, in August 2016 at an interest rate of 2.079 percent.

Slices of the $2 billion bond will be issued as needed, Folwell said. The state will consult with the three major bond rating agencies before each allotment to ensure the state’s AAA bond rating would not be affected.

Folwell updated reporters on his scrutiny of a proposed merger between ECU Physicians, the medical practice of the Brody School of Medicine at East Carolina University, and Vidant Medical Group, a private entity that would assume controlling interest.

He met with Vidant principals recently, and told them “there’s some things that we need that will give us assurance that this merger will not impact the security and safety of bonds that have been previously issued, will not impact, and have some clarity about, how the nearly 1,100 state employees are going to be dealt with as employees of this new entity.”

Folwell said he hasn’t gotten that information. He wants to determine how much the state is spending to pursue this merger.

He said he also is reviewing a letter of intent signed by nonprofit Mission Health, a community hospital system vital to western North Carolina, to be acquired by HCA Healthcare Inc. HCA, a Nashville-based for-profit health care company, owns 177 hospitals and 119 surgery centers in the U.S. and United Kingdom.

Both acquisitions could have impose costs on the state health and pension plans, Folwell said.

He’s not sure how much say the Treasurer’s Office has over the deals, but he has spoken to Attorney General Josh Stein about the Mission Health matter. That health system may need to satisfy certain state regulations to convert from nonprofit to for-profit status.