Executive Summary

North Carolina’s economy – from its tobacco fields and hog farms to textile mills and machinery factories – has been deeply shaped by U.S. trade policy. This brief examines how tariffs have affected the state historically and under the Trump administration’s 2017–2021 trade measures, with data-driven insights into impacts on major industries. Key findings include:

• Historical context: North Carolina’s manufacturing base (textiles, apparel, furniture) thrived under earlier protective trade policies but suffered massive job losses after trade liberalization in the 1990s and 2000s. Employment in textile mills and apparel manufacturing fell by 85% and 94% respectively from 1993 to 2022 (North Carolina Department of Commerce, 2023). Meanwhile, agriculture became increasingly export-oriented – by the 2010s, crops and livestock like tobacco, soybeans, and pork relied on foreign markets. China emerged as a top buyer for North Carolina’s tobacco and soy, and NAFTA opened markets for hog producers. These trends set the stage for the state’s vulnerability to new tariffs.

• Trump-era tariff shocks: The Trump administration’s tariffs (2018–2019) – including broad tariffs on steel/aluminum and 25% tariffs on $250+ billion in Chinese goods – triggered swift retaliation against U.S. exports. This trade war hit North Carolina disproportionately. China was the largest foreign customer for North Carolina soybeans and tobacco before 2018 (Associated Press, 2018). After retaliatory tariffs, the state’s exports of these commodities plummeted. Tobacco leaf exports to China collapsed from $162 million in 2017 to just $4 million in 2018, effectively vanishing (Laurinburg Exchange, 2019). Soybean prices likewise plunged to decade lows (~$8–$8.40 per bushel) amid the loss of Chinese demand (CNBC, 2018). Pork, North Carolina’s top agricultural commodity by value, was hit with Chinese and Mexican duties; China’s imports of U.S. pork fell by over 50% in 2018 (Business Insider, 2019), hurting North Carolina’s hog farmers even as federal aid partially offset losses. On the manufacturing side, tariffs on imported inputs drove up costs – for instance, the 2018 steel and aluminum tariffs raised U.S. metal prices ~25%, squeezing North Carolina’s machinery, automotive parts, and brewing industries (WXII12, 2018). One analysis found washing machine prices jumped 12% after new tariffs (Carolina Journal, 2019), illustrating the consumer cost of these measures.

• Economic and social impacts: Tariffs and retaliatory counter-tariffs exacted measurable costs on North Carolina’s economy. Farm export losses were severe – China’s retaliatory tariffs alone cut U.S. agricultural exports by an estimated 76% in targeted sectors (USDA ERS, 2020), including an $81 million loss in North Carolina tobacco sales (the highest of any state). Many farmers saw overseas markets evaporate overnight. In response, the USDA delivered about $105 million in emergency trade assistance to North Carolina farms in 2018–2019 (WUNC, 2019). Even so, farm incomes and rural communities were strained; North Carolina experienced a 33% rise in farm bankruptcies from 2018 to 2019 (Carolina Journal, 2019). Manufacturers faced uncertainty and thinner profit margins as input costs rose. Some businesses delayed investments or scaled back production. Community and political leaders in North Carolina’s rural counties grew concerned that the tariff fallout was “deep and ongoing,” in the words of the state Farm Bureau president (Laurinburg Exchange, 2019). Polling in mid-2019 showed softening support even among typically conservative farmers (only 56% of farmers said they would vote for Trump again, down from 79% earlier that year), reflecting the political stakes of the trade war in a key swing state.

• Policy recommendations: North Carolina’s experience illustrates that broad-brush tariffs can carry steep local costs. Going forward, state and federal policymakers should pursue strategies to preserve North Carolina’s access to global markets while protecting its workforce. Key recommendations include advocating for diversified export markets (to reduce over-reliance on any single country), mitigating tariff impacts on manufacturers by improving tariff exemption processes for critical inputs, strengthening safety nets (e.g., including tobacco in future farm aid or trade adjustment assistance programs), and investing in the competitiveness of local industries. North Carolina’s long-term economic health will benefit from stable, rules-based trade that allows its agriculture and manufacturing sectors to thrive without bearing disproportionate collateral damage from geopolitical disputes.

Historical Background

North Carolina’s economy and trade policy have long been intertwined. In the 19th century, the agrarian South (including North Carolina) generally opposed high protective tariffs – as primarily exporters of cotton and tobacco and importers of finished goods, they bore higher costs without equal benefit. By contrast, Northern states with budding industries favored tariffs to shield themselves from European competition. This tension underscored early historical debates on U.S. tariff policy. Fast forward to the 20th century: North Carolina evolved into a manufacturing powerhouse in textiles, apparel, and furniture, while remaining a national leader in tobacco and other agricultural commodities. Mid-century trade policies and quotas (such as the Multi-Fiber Arrangement that limited textile imports) provided some shelter for North Carolina’s industries. However, the later push toward global trade liberalization fundamentally reshaped the state’s economic landscape.

Manufacturing in Decline with Trade Liberalization

North Carolina’s manufacturing sector prospered through the mid-1900s, but starting in the 1990s it faced intense global competition. Free trade agreements and the entry of low-cost producers dramatically reduced tariff barriers. The North American Free Trade Agreement (NAFTA) in 1994 and China’s accession to the World Trade Organization in 2001 opened U.S. markets to imports – and North Carolina’s traditional industries felt the impact. Factories closed or moved offshore in search of cheaper labor. Between 1993 and 2010, North Carolina lost roughly 400,000 manufacturing jobs (nearly half the sector’s employment) (North Carolina Department of Commerce, 2023). The steepest declines came in the textile and apparel industries, which had been pillars of the state’s economy. Textile mill employment in North Carolina fell 85% from 1993 to 2022, and apparel manufacturing fell 94% (North Carolina Department of Commerce, 2023), as trade deficits and globalization “decimated industry employment” (North Carolina Department of Commerce, 2023). Furniture manufacturing likewise declined by approximately 59%. By 2022, these once-dominant sectors made up only 13.6% of the state’s factory jobs, down from 40% in 1993 (North Carolina Department of Commerce, 2023). This historical trend shows how sensitive North Carolina’s workforce is to shifts in trade policy and global competition.

Figure: North Carolina’s manufacturing employment was nearly cut in half over the last 30 years. Average annual manufacturing jobs fell from ~832,000 in 1993 to ~472,000 in 2022, with the sharpest drop in the early 2000s as textile, apparel, and furniture factories closed (North Carolina Department of Commerce, 2023).

The loss of protected domestic markets forced North Carolina’s manufacturing to adapt. In recent years, the state has diversified into new manufacturing areas – chemicals are now the largest export category (e.g., pharmaceuticals, plastics) at $16.5 billion in 2024 (U.S. Trade Representative, 2024) – but many communities are still recovering from the disappearance of textile mills and furniture plants. The historical lesson is clear: tariff and trade policies can create both winners and losers. North Carolina’s experience in the 1990s and 2000s was largely one of painful adjustment in manufacturing, as tariffs fell and imports surged.

Agriculture’s Growing Export Dependence

In contrast to manufacturing, North Carolina’s agriculture has often benefited from trade opening – but that also means exposure to tariff retaliation. Tobacco, once mostly sold to domestic cigarette makers under a federal quota system, increasingly turned to exports after the quota program ended in 2004. North Carolina leads the nation in tobacco production, and by the 2010s China had become the top market for the state’s flue-cured tobacco (Associated Press, 2018). Likewise, the state’s farmers ramped up soybean acreage (about 1.6 million acres, the largest of any crop in NC) to feed rising global demand, particularly from China’s livestock industry (Laurinburg Exchange, 2019). The hog industry also expanded – North Carolina is the No. 2 hog-producing state (after Iowa) and a major pork exporter. Trade agreements like NAFTA opened Mexico (now a leading buyer of U.S. pork) and other deals expanded poultry and meat exports to Asia. By the mid-2010s, agriculture and agribusiness contributed over $87–111 billion to North Carolina’s economy (Laurinburg Exchange, 2019; Washington Post, 2019), and the state consistently ranked among America’s top 15 agricultural exporters (U.S. Trade Representative, 2022). Roughly one-sixth of North Carolina farm income comes from exports, and foreign markets became “vital arteries pumping life into rural economies across the state” (John Locke Foundation, 2019).

However, this success came with a vulnerability: North Carolina became heavily reliant on a few key overseas customers, especially for its top commodities. By 2016, China was the No. 1 market for North Carolina’s agricultural exports, accounting for 16% of the total (Associated Press, 2018). In that year, North Carolina’s top agricultural export products were pork (ranked 1st by value), tobacco (2nd), and soybeans (5th) – together nearly 50% of the state’s agricultural export value (Associated Press, 2018). Over $500 million in NC-grown tobacco was exported in 2016, with China as the largest (and fastest-growing) buyer (Associated Press, 2018). Pork was the state’s single most valuable export, and China had begun importing significant quantities of U.S. pork as its domestic pork demand outpaced its production. This meant that any disruption in trade – especially with China – would be acutely felt on North Carolina farms. In sum, by the late 2010s North Carolina’s economic fortunes were tightly linked to global trade flows: manufacturing had adjusted (with difficulty) to import competition, and agriculture had doubled down on export markets. This backdrop set the stage for the impact of the Trump administration’s tariff-centric trade policies.

Trump-Era Tariff Impacts on North Carolina (2017–2021)

The 2017–2021 period saw an unprecedented use of tariffs as a policy tool by the United States, leading to trade conflicts that directly affected North Carolina’s key industries. President Trump implemented tariffs on steel and aluminum imports (March 2018) and on hundreds of billions of dollars of goods from China under Section 301 (mid-2018 through 2019). In return, U.S. trading partners – notably China, but also the EU, Canada, Mexico, and others – imposed retaliatory tariffs aimed at U.S. exports. North Carolina’s major export sectors were caught in the crossfire. Below is a sector-by-sector analysis of these impacts.

Agriculture: Pork, Tobacco, Soybeans and More

For North Carolina’s agricultural producers, the trade war arrived swiftly and with devastating force. In April 2018, China retaliated against U.S. steel/aluminum tariffs by imposing a 25% tariff on U.S. pork and other products, and soon after targeted soybeans and tobacco with their own 25% tariffs (Associated Press, 2018). As a top pork producer and the leading tobacco grower, North Carolina was hit hard. Farmers woke up to the news that their largest export market was effectively closing its doors. “When I woke up, it was like, here we go,” said one North Carolina Farm Bureau official as dozens of NC farm commodities appeared on China’s tariff list (Associated Press, 2018).

The numbers bear out the severe impact:

• Tobacco – a near wipeout: North Carolina’s flue-cured tobacco had been a rare growth story thanks to Chinese demand. Tariffs reversed that overnight. In 2017, North Carolina exported $162 million worth of tobacco to China; in 2018, it was only $4 million – essentially a 98% collapse (Laurinburg Exchange, 2019). By 2019, exports fell further toward zero. China was the “only growing market” for NC tobacco (Associated Press, 2018), so losing it dealt a heavy blow. Other countries (like Brazil) quickly moved to fill China’s needs (Associated Press, 2018), potentially making the loss permanent. Notably, when the USDA rolled out trade aid, tobacco was excluded from direct payments, leaving North Carolina’s tobacco farmers with “no safety net for a trade war” (Laurinburg Exchange, 2019; Associated Press, 2018). The state’s economy absorbed an estimated $81 million loss from retaliatory tobacco tariffs in 2018–19 (USDA ERS, 2020), largely concentrated in North Carolina’s rural, tobacco-dependent counties.
• Soybeans – prices plunge: Soybeans are a major North Carolina crop (nearly $0.5 billion in export value in recent years) (U.S. Trade Representative, 2022). China, the world’s largest soybean importer, had been buying huge quantities from U.S. farmers. The 25% Chinese tariff in mid-2018 caused U.S. soybean exports to China to drop by about 75% year-over-year (U.S. International Trade Commission, 2019). With silos brimming with unsold beans, prices nosedived. Soybean futures fell below $8.50 per bushel in mid-2018 – a nine-year low (CNBC, 2018), and in 2019 hit ~$8.00, the lowest in a decade (Laurinburg Exchange, 2019). North Carolina soybean growers suddenly faced a glut with their top customer gone. While some soybeans were rerouted to other countries, it wasn’t enough to prevent a revenue hit. The North Carolina Soybean Producers Association lamented that the industry had “wilted” under the tariffs (Laurinburg Exchange, 2019). Farmers had banked on export growth; instead, many had to rely on federal aid payments to stay afloat. Indeed, 82% of the national trade aid went to soybean growers (WUNC, 2019). North Carolina’s share of this aid helped, but as one local farmer noted, “What we have gotten back is nothing like what we have lost” (WUNC, 2019) – underscoring that government checks were no substitute for stable market access.
• Pork – retaliatory one-two punch: Pork is North Carolina’s No. 1 agricultural export by value, at ~$780 million in 2022 (U.S. Trade Representative, 2022). Tariffs struck this industry from two sides. China imposed a 25% tariff on U.S. pork in April 2018 (later raising total duties even higher), and Mexico – the largest export market for U.S. pork – imposed its own 10–20% tariffs on U.S. pork in June 2018 in retaliation for steel tariffs (USDA ERS, 2020). The result was a significant drop in exports and lower hog prices in 2018. China’s imports of U.S. pork more than halved (from >500,000 tons in 2017 to ~263,000 tons in 2018) (Business Insider, 2019), according to customs data. This was despite China’s own domestic pork shortage (due to swine fever) – Chinese buyers simply turned to European and Brazilian pork, pricing Americans out. Mexico’s tariff, meanwhile, caused U.S. pork exports to Mexico to fall about 30% by late 2018. North Carolina hog farmers, many of whom supply global meat companies, felt the pain via depressed prices and backlogs. The NC Pork Council noted that while the state’s industry could survive short-term disruption (most NC pork is consumed domestically or exported to non-China markets), the tariffs still meant “millions” in lost potential sales (Carolina Journal, 2019). Pork represented about 5% of nationwide farm export losses from retaliation (an estimated $646 million loss per year) (USDA ERS, 2020) – a portion of that hitting North Carolina’s $10 billion pork industry.
• Other farm products: The trade war’s ripple effects extended to cotton, corn, wheat, sorghum, and meat poultry, all of which North Carolina produces. China’s retaliation list was broad – 128 U.S. products including cotton, beef, and fruits had new tariffs (Associated Press, 2018). North Carolina grows cotton (used in textiles) and raises beef cattle, albeit to a lesser degree than the above commodities. Still, diversified farms saw multiple hits. Even specialty products felt impacts: for example, the EU’s retaliatory tariffs (in response to U.S. steel tariffs) targeted iconic American farm goods like whiskey and various food items (USDA ERS, 2020). Turkey (the country) slapped tariffs up to 70% on U.S. tobacco and spirits (USDA ERS, 2020), which could affect North Carolina tobacco and sweet potato liquor exports. In aggregate, U.S. agricultural exports fell from $21.4 billion to $9.2 billion to China between 2016 and 2018 (Laurinburg Exchange, 2019), and North Carolina – being the 13th-largest farm exporter – bore a share of that decline.

Beyond the raw economics, the social impact on North Carolina’s rural communities was profound. Farm incomes dropped; some farmers left crops unharvested due to low prices. Agribusinesses (equipment dealers, grain elevators, trucking firms) saw reduced activity. The uncertainty also took a psychological toll – farmers already deal with weather and commodity volatility, and the added unpredictability of trade policy made planning difficult. As one North Carolina tobacco grower explained during the tariff standoff, “It’s more of a guess now than it’s ever been in my lifetime” (Washington Post, 2019). This uncertainty bled into the political realm. North Carolina’s rural counties lean Republican and had strongly supported President Trump, but as the trade war dragged on through 2019, questions arose about political realignment. Observers wondered if tariff-related farm pain might “upset the GOP’s grip” on federal offices in this battleground state (Washington Post, 2019). By late 2019, farmer sentiment was mixed – many appreciated the tough stance on China and the bailout payments, but others, facing a second or third year of difficulty, grew anxious for a resolution. Larry Wooten, president of the NC Farm Bureau, described the tariff damage as “deep and ongoing” (Laurinburg Exchange, 2019), and urged that “agriculture not be caught in the crosshairs” of trade battles (Laurinburg Exchange, 2019).

In short, the Trump-era tariffs dealt North Carolina agriculture a heavy blow, arguably the most severe since the 1980s farm crisis. While federal aid and the eventual trade truce (the early 2020 “Phase One” deal) provided some relief – China agreed to purchase more U.S. farm goods, and indeed bought large quantities of soybeans and pork in 2020 – not all sectors recovered (tobacco exports to China, for example, have not resumed at scale). The episode highlighted North Carolina’s exposure to trade risk and has prompted discussions in the farm community about diversifying export markets and even crop diversification (some NC tobacco farmers began exploring hemp or other alternatives) (PBS, 2020). It also underscored the importance of stable trade relationships for the state: as one analysis noted, North Carolina’s farmers “need consistent access to international markets and a policy environment that doesn’t treat them as bargaining chips” (John Locke Foundation, 2019).

Manufacturing: Textiles, Machinery, and Tariff-Driven Costs

North Carolina’s manufacturers experienced the tariff turbulence in a different way – less through lost exports (except for a few sectors) and more through increased costs and supply chain disruptions. The Trump administration’s trade measures included tariffs on imported inputs that many NC industries rely on, and foreign retaliatory tariffs on certain U.S. finished goods. The net effect was to raise production costs, squeeze profit margins, and create uncertainty for businesses ranging from multinational firms to small workshops.

Steel and Aluminum Tariffs (Section 232)

In March 2018, the U.S. applied a 25% tariff on imported steel and 10% on aluminum (with only minor exceptions). While North Carolina is not a top primary metal producer, it is home to hundreds of companies that use steel or aluminum. These include auto parts makers, machinery and equipment manufacturers, appliance and furniture producers, construction firms, and even craft breweries. Nationally, jobs in steel-using industries outnumber steel-producing jobs by about 80 to 1 (Econofact, 2018), a ratio likely reflected in North Carolina. Thus, the steel/aluminum tariffs acted like a tax on many North Carolina businesses. U.S. steel prices spiked after the tariffs – by mid-2018, domestic steel cost roughly 25–30% more (PBS, 2018), benefiting steel makers but hurting downstream manufacturers. In North Carolina, one immediate example was the brewing industry: aluminum cans became pricier. A Winston-Salem brewery noted that after the 2018 tariffs, “anybody who drinks beer…knows those costs did go up,” prompting the brewery to start canning in-house and seek other efficiencies (WXII12, 2018). Similarly, equipment manufacturers and construction companies reported increased building costs due to rising input prices (WECT, 2018; WXII12, 2018).

It is worth noting that a few stakeholders benefited. Nucor Corp., based in Charlotte, is one of America’s largest steel producers and likely saw increased demand (Governor of North Carolina, 2018). However, while steel production jobs number in the thousands, steel-using manufacturing jobs number in the tens of thousands. A North Carolina metal fabricator that buys steel from Nucor still faced higher prices. Overall, the economic consensus suggests the Section 232 tariffs created harmful ripple effects for NC manufacturers (Carolina Journal, 2019). Higher input costs made NC products less competitive both at home and abroad.

Tariffs on Chinese Goods (Section 301)

Starting in July 2018, the U.S. imposed sweeping tariffs on imports from China in several rounds, ranging from 10% to 25% on thousands of products. China is a key source of intermediate goods for North Carolina manufacturers. Textile mills import Chinese yarn and fabrics; electronics firms buy components; machinery companies require precision tools. These tariffs raised the cost of production across NC industries. The state’s textile and apparel industry – employing around 34,000 North Carolinians in 2022 (North Carolina Department of Commerce, 2023) – faced increased costs on imported materials. As a result, textile manufacturers reported rising expenses and declining revenue (Carolina Journal, 2019). This was especially damaging to an industry already facing global pressure.

Some domestic producers may have seen a slight advantage

For instance, tariffs on finished Chinese textiles may have helped a few remaining U.S. sewing operations. But most NC textile firms operate globally, both importing and exporting within supply chains. Studies showed that consumers absorbed much of the cost increase. Tariffs on imported washing machines led to a 12% price increase on washers and dryers (Carolina Journal, 2019), raising costs for North Carolinians.

Retaliatory Tariffs on U.S. Exports

North Carolina manufacturers also suffered when countries retaliated. The EU, Canada, and China all imposed duties on U.S. industrial and consumer goods. The EU’s list included motorcycles, cigarettes, and wood products (Politico, 2018). This affected NC exporters of wood flooring and furniture. Mexico’s retaliation hit U.S. furniture, an industry with deep roots in North Carolina. Chinese retaliation went beyond agriculture and included autos and machinery. While NC doesn’t produce cars, it does make heavy trucks and auto parts (e.g., Freightliner). Chinese tariffs raised costs and reduced competitiveness abroad. Chemicals and plastics – one of NC’s top export sectors – were also affected by Chinese tariffs. In fact, by 2023, North Carolina’s exports to China were down 9.5% year-over-year and stagnant compared to 2017 (U.S. Trade Representative, 2023).

Overall Assessment

Trump-era tariffs had mixed effects on NC manufacturing, but the negatives generally outweighed the positives. Some end-product industries (e.g., furniture) may have seen limited protection, but higher costs on inputs and retaliation drove losses elsewhere. North Carolina’s economy is deeply intertwined with global trade. Protectionist measures disrupted that structure. By 2019, anecdotal reports showed manufacturers delaying hiring or investment due to tariff uncertainty (Laurinburg Exchange, 2019). Small firms were disproportionately hurt, lacking the ability to navigate complex exemption systems. Continued tariffs were estimated to cost U.S. consumers $51 billion annually in higher prices (Port City Daily, 2024), adding inflationary pressure.

Some NC firms responded by shifting supply chains – sourcing from Vietnam or increasing domestic inputs – but this was costly and slow. Although proponents hoped tariffs would lead to a manufacturing revival, North Carolina’s manufacturing employment remained relatively flat around 470,000 from 2018 to 2021 (North Carolina Department of Commerce, 2023). Economists argue that, if anything, tariffs slowed job growth due to rising costs.

Conclusion

The Trump tariff era stressed North Carolina’s economy. Agriculture lost markets. Manufacturers faced rising costs and uncertainty. Exports declined, and inflation hit consumers. Politically, North Carolina’s leaders across party lines sought relief and urged resolution. The ultimate lesson: even when aimed abroad, tariffs often hit home hardest.

Policy Recommendations

To support North Carolina’s economy and insulate it from future trade shocks, this brief offers the following policy recommendations for state and federal policymakers and economic stakeholders:

• Diversify Export Markets and Restore Market Access: North Carolina should work with federal authorities to expand and diversify markets for the state’s key exports. This means pursuing new trade agreements or market access deals beyond China – for instance, engaging with emerging markets in Southeast Asia, Latin America, and Africa for products like tobacco, pork, and soybeans. Rejoining or forming high-standard trade pacts (such as a revised Trans-Pacific Partnership) could open doors for North Carolina exports and reduce reliance on any single buyer. Policymakers should also prioritize resolving remaining trade disputes to remove retaliatory tariffs on NC products. For example, continuing U.S.-China negotiations to lower Chinese tariffs on agricultural goods (as partially achieved in the 2020 Phase One agreement) will help NC farmers regain lost sales. Every effort should be made to fight for North Carolina’s exporters – ensuring trade agreements include provisions for fair access for products like tobacco and pork. In practice, this might involve trade missions to promote NC products in alternative markets (e.g., promoting tobacco in Middle Eastern or Asia-Pacific countries) and supporting federal legislation that requires strategic analysis of tariff impacts on state-level agriculture.
• Mitigate Supply Chain Costs for Manufacturers: To keep North Carolina’s manufacturing competitive, it is crucial to shield producers from excessive input costs. The federal government should improve and institutionalize the tariff exclusion process for imports – making it easier for NC companies to get relief from tariffs on raw materials or components not available domestically. For instance, if a North Carolina machinery firm needs a specific type of steel or electronic part only made in China, there should be a streamlined way to waive tariffs on that input. Additionally, reconsideration of the remaining Section 232 steel/aluminum tariffs is warranted: if domestic metal prices stay far above global rates, NC manufacturers will remain at a disadvantage. State officials can advocate at the federal level to roll back or reduce tariffs that harm downstream industries, or to replace them with more targeted measures (e.g., use quotas or enforce anti-dumping laws on specific unfairly traded products rather than blanket tariffs). In essence, future trade enforcement should be surgical, not sweeping, to avoid unintended harm to North Carolina businesses. North Carolina’s congressional delegation could propose legislation tying broad tariff actions to an economic impact review on states and requiring mitigation plans for affected industries.
• Strengthen Support for Affected Workers and Farmers: Trade turbulence will happen again, whether from tariffs or other shocks, so North Carolina should bolster its safety nets and adjustment programs. This includes ensuring farmers and manufacturers have access to relief when trade disruptions occur. The 2018–19 farm bailouts revealed gaps – for example, tobacco growers were left out (Laurinburg Exchange, 2019). Going forward, federal farm support programs should be made more flexible to include all major commodities in states like North Carolina. Lawmakers should consider a permanent “Trade Injury Fund” for agriculture, so that aid can be quickly deployed to any sector hit by foreign retaliation or market loss. For manufacturing workers, Trade Adjustment Assistance (TAA) – which provides retraining and benefits to workers displaced by trade – should be reauthorized and expanded. North Carolina, having lost many manufacturing jobs to trade, knows the value of retraining; expanding TAA eligibility to workers impacted by tariff-induced downsizing could help, since currently TAA mainly covers offshoring job losses. At the state level, North Carolina can increase funding for its workforce development and apprenticeship programs in regions heavily impacted by trade or tariffs. For example, if a plant in eastern NC downsizes due to higher input costs (tariff-related), the state could offer special grants to retrain those workers in growing fields (such as aerospace or biotech manufacturing in the Research Triangle). Investing in people and communities ensures that short-term trade shocks don’t lead to long-term decline.
• Promote Value-Added Manufacturing and Ag-business: North Carolina can lessen its vulnerability to raw commodity tariffs by moving up the value chain. This means encouraging more in-state processing and manufacturing of its raw products. For agriculture, instead of just exporting soybeans or hogs, North Carolina could expand industries like soybean processing (oil, feed) or meat processing and specialty food production, which add value and diversify revenue streams. Value-added products often face different market dynamics and can be exported to a wider array of countries (for instance, processed foods or branded pork products might find markets even if bulk commodity trade is disrupted). The state can support this by providing incentives or technical assistance for farmers co-venturing into processing, or attracting investment in food processing facilities. In manufacturing, North Carolina should continue to invest in advanced manufacturing and innovation (sometimes called Industry 4.0 – automation, AI, advanced materials) (North Carolina Department of Commerce, 2023). A more innovative manufacturing base can better absorb cost shocks and stay competitive. The state’s Emerging Technologies Fund and partnerships with universities (like NC State’s industry collaboration programs) can be harnessed to help traditional industries (textiles, furniture) upgrade their technology. A modernized textile mill using automation and producing technical textiles (for medical or automotive use) could compete even if import tariffs fluctuate. By focusing on higher-value products and efficiency, North Carolina firms can be more resilient to tariff-driven cost pressures.
• Engage in Proactive Trade Advocacy: North Carolina’s policymakers – from the Governor’s office to its U.S. Senators and Representatives – should take a more proactive role in trade policy discussions to ensure the state’s interests are heard. This could involve forming a state-level Trade Advisory Council that includes industry leaders (farm bureaus, manufacturers associations, port officials) to monitor trade issues and advise on responses. When future trade policies or tariffs are proposed at the federal level, North Carolina should present data on likely impacts to its economy (much as was done in 2018 when farm and business groups sounded alarms). Advocacy can also mean championing the benefits of trade in the public discourse: highlighting that 43% of NC’s 2024 goods exports (>$18 billion) went to FTA partner countries (U.S. Trade Representative, 2024), or that exports to China alone support ~28,000 NC jobs (U.S.-China Business Council, 2023). These facts can help build political support for avoiding destructive tariff wars. On the flip side, when unfair trade practices do need addressing, NC leaders can push for multilateral solutions through organizations like the WTO, rather than unilateral tariffs. In essence, North Carolina should advocate for a trade policy that enforces rules (to protect industries from dumping or subsidies) without resorting first to blanket tariffs. Such a balanced approach would protect the state’s industries both from unfair foreign competition and from the collateral damage of trade conflicts.
• Infrastructure and Export Promotion: As a complementary measure, North Carolina can enhance its trade infrastructure to better withstand global ups and downs. Investing in the Port of Wilmington and inland ports, for example, will lower costs for exporters and make it easier to shift goods to new markets if one market (like China) closes. Similarly, supporting logistics and transportation networks helps manufacturers pivot their supply chains when tariffs disrupt usual routes. The state should also continue funding export promotion programs (through the Economic Development Partnership of NC and Department of Agriculture) that help small businesses find overseas buyers. By broadening the base of companies that export (currently over 11,000 NC businesses export) (U.S. Trade Representative, 2024), North Carolina’s economy becomes more flexible – a diverse export portfolio means a tariff on one product or one country is less catastrophic.

Implementing these recommendations would make North Carolina more resilient in the face of future trade policy shifts. The 2018–2021 tariff episode was a wake-up call: it demonstrated the need for North Carolina to hedge against trade risks and to be at the table when trade decisions are made. With a coherent strategy, the state can leverage its strengths – a rich agricultural sector, a skilled manufacturing workforce, and a spirit of innovation – to thrive in global markets without being unduly harmed by the ebbs and flows of tariff politics.

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