Report warns tariffs could cost NC farms $700M, 8,000 jobs

A new report out this week examines the potential economic effects of tariffs implemented during the Trump administration, estimating they could lead to nearly $700 million in losses and approximately 8,000 jobs affected in North Carolina’s agricultural sector, the state’s largest industry, which contributes $111.1 billion annually to the economy.

The report, “How Tariffs Threaten North Carolina Agriculture” from Carolina Journal’s publishing organization, the John Locke Foundation, found potential losses of up to $695 million to the state’s farming industry, representing approximately one-third of the average net farm income in the state, says the press release out on Monday. Economic losses in the state resulting from trade policy retaliation have the potential to exceed $1.9 billion, or 2% of the state’s GDP. 

“When agriculture is targeted in international trade disputes, North Carolina is especially vulnerable,” Donald Bryson, president and CEO of the John Locke Foundation, said in a press release. “This report shows that the costs are not abstract — they mean lost farm income, lost jobs, and real harm to rural communities.”

The report analyzes NC’s major commodities and their likelihood of being exported, and while NC’s major commodities do not perfectly align with top US exports, a decline in major US exports will still impact the state’s agricultural industry. 

“…if exports were to fall, that would leave more supply in the American domestic market, which would mean lower prices for all producers of affected commodities, whether their commodities are exported or not,” wrote Dr. Jeffrey Dorfman, author of the report and is the Hugh C. Kiger Distinguished Professor of Agricultural and Resource Economics at North Carolina State University.

Additionally, the report analyzes major NC commodities (soybeans, corn, and wheat) that would be at risk if retaliatory trade policies were implemented. In terms of annual production value, all are essential commodities to the states, with significant export values and major exports to countries that could retaliate against the US in response to recent changes in trade policy. They are also commodities for which a high dollar value of North Carolina production is exported. These are the commodities most at risk from the rapidly evolving and uncertain future world trade policies. 

“They are all important agricultural commodities to the state in terms of annual production value, they have a significant dollar value of exports, they feature major exports to countries that have or might plausibly retaliate against the U.S. in response to the recent changes in its trade policy, “and they are commodities for which a high dollar value of North Carolina production is exported. These are the commodities most at risk from the rapidly evolving and uncertain future world trade policies,” according to the report. 

The report examines both historical examples and academic literature to predict the price sensitivities of specific commodities and assess the economic impact of retaliatory tariffs. The report references the 2018 trade dispute in which China boycotted US soybeans, which was re-run in 2025. 

“It suggests that even though North Carolina farmers are partially shielded from damage due to their soybeans having a strong local market of demand from in-state livestock producers,” wrote Dorfman. “With annual production in North Carolina of about 60 million bushels, such a decline would yield an estimate of $90 million at risk.”

NC’s biggest crops

Tobacco and sweet potatoes are two of the largest crops in North Carolina. Prices dropped 5-10 cents per pound for American tobacco when China stopped buying American tobacco between 2019 and 2020. This resulted in a loss of approximately $30 million to NC tobacco growers, or a 5% reduction in normal gross sales. 

The most recent upheaval for sweet potato farmers occurred in 2019, following a poor crop in 2018, which left few US sweet potatoes available for export.  

“…the European Union grabbed market share, leading to very depressed export sales in 2019,” according to the report. 

This resulted in a price drop of approximately 10%.  With annual production exceeding $300 million in an average year, NC sweet potato farmers could easily lose upwards of $30 million if export markets were lost. 

For cotton growers, if China and Mexico retaliate and purchase 10% less from the United States, prices are expected to drop by 60%, according to the report. As recently as 2009 and 2001, prices have dropped below 40 cents per pound.  

Based on academic analyses, pork is one of North Carolina’s largest commodities, resulting in a conservative estimate of $430 million in losses for pork producers. Additionally, cotton growers could lose $125 million, tobacco growers could lose $90 million, and sweet potato growers could lose nearly $50 million. 

If export markets are closed to North Carolinian farmers, Dorfman found that production would be reduced to minimize losses, meaning fewer workers would be needed. In his estimation losses assessed would amount to 3.5% of the state’s farm output but would be concentrated in labor-intensive commodities such as tobacco and sweet potatoes. This would account for approximately 8,000 jobs being lost: 3,000 in agricultural production and 5,000 in food processing, as well as cigarette, fiber, and forestry and wood product manufacturing.

“Report warns tariffs could cost NC farms $700M, 8,000 jobs” was originally published on www.carolinajournal.com.