Tariffs could impact NC’s major industries and threaten job losses, experts say. What to know
In response to President Donald Trump’s plans to impose tariffs on products from China, Mexico and Canada, two of those countries responded with proposed taxes of their own.
A tariff is a tax applied by governments on imported goods, according to the International Trade Administration.
The retaliatory tariffs from Canada are on pause, as are the taxes on Canadian products. But a 10% tariff on Chinese goods is in effect, and China has announced a 15% tariff on coal and liquefied natural gas products and a 10% tariff on crude oil, agricultural machinery and large-engine cars imported from the U.S., The Associated Press reported.
Here’s how North Carolina’s businesses and residents may be affected by tariffs.
How will tariffs impact NC?
Retaliatory tariffs placed on U.S. exports could affect American businesses.
“We would see demand for those goods probably go down, because with a higher price, people would buy less of them,” said Robert Handfield, a distinguished professor of supply chain management at North Carolina State University.
A drop in sales could lead to a decline in revenue for those companies, Handfield said. In turn, jobs may be lost.
But tariffs meant to bolster U.S. industries against foreign competition may also have a negative effect on employment, said Andrew Greenland, an assistant professor of economics at NC State.
If the U.S. puts a tariff on Chinese steel, for example, Chinese steel will likely become more expensive for U.S. consumers. But U.S. steel manufacturers may also, like their foreign competitors, raise prices, Greenland said.
That may result in a rise in employment for U.S. steel manufacturers of the good. But steel, which is used in industries including construction and manufacturing, has become more expensive. If companies can’t afford higher prices, projects may stall, and fewer employees may be needed.
Tariffs — or even the threat of tariffs — can hinder economic growth more broadly, economists say. Retaliatory tariffs specifically would likely result in higher inflation rates and lower gross domestic products in Canada and the U.S., according to the Pierson Institute for International Economics.
“The bigger concern that economists have is that when you look at historical precedents for the imposition of significant tariffs, and those tariffs are kept for for a serious period of time, that tends to slow economic growth,” NC State economist Mike Walden told The Charlotte Observer. “In fact, many economists make an argument that the 1930s Depression was at least in part influenced by the fact that most countries imposed tariffs.”
Which NC industries could be affected by retaliatory tariffs?
In 2023, North Carolina exported $7.7 billion in goods to Canada and $5.8 billion to China, according to the Office of the U.S. Trade Representative.
Any North Carolina-produced goods that fall under the categories included in Canada and China’s tariff lists would be taxed.
Canada said it would place tariffs on many agricultural products including:
- Chicken and turkey meat
- Tobacco, cigarettes and cigars
- Peanuts
These products generate some of the highest income streams among North Carolina’s farms, according to a 2023 report from the North Carolina Department of Agriculture. The state exported nearly $400 million worth of agricultural products to Canada alone in 2023, according to Canada’s Department of Agriculture.
Many types of furniture, also on Canada’s tariffs list, are produced in North Carolina, which is home to the world’s largest furniture trade show. Ashley Furniture has a manufacturing and distribution facility in Advance in Davie County, and Kincaid Furniture was founded in North Carolina in 1946.
Motor vehicle parts, including tires, are subject to Canada’s tariffs. Bridgestone’s facility in Wilson, for example, manufactures passenger and light truck tires.
North Carolina items on Canada’s retaliatory tariffs list
Here are some other NC products that might be affected by Canada’s retaliatory tariffs:
- Motor vehicle and aircraft parts
- Compressors and pumps
- Iron and steel alloys
- Produce
- Nuts
- Baked goods
- Poultry
- Sausages and other preserved meats
- Furniture
- Plastics
- Textiles
This story was originally published February 6, 2025 at 8:57 AM with the headline "Tariffs could impact NC’s major industries and threaten job losses, experts say. What to know."
