North Carolina farmers are still paying the “Trump Tax”

April 15, 2024


  • The Trump administration’s trade policy cost North Carolina farmers billions
  • Parts of the state’s agricultural sector still have not recovered fully
  • A second Trump administration would be far worse


One of the Trump administration’s signature actions was withdrawing the United States from international agreements. Trump withdrew from NAFTA, only to sign a nearly identical deal just a few months later – seemingly just for show. He pulled out of the Paris Agreement on climate change; credibly threatened to pull out of NATO, a security agreement that has underlined global security for decades; and ended any chance of normalized relations between the US and Iran by pulling out of the successful nuclear deal negotiated by the Obama administration.

But one of the Trump administration’s most impactful diplomatic missteps may have been withdrawing from the Trans-Pacific Partnership (TPP) just two days after inauguration – a step that today, seven years on, is still costing North Carolina’s farmers deeply.

The Missed Opportunity of TPP

Trump’s purported rationale for withdrawing from the agreement was that it would hurt American workers and businesses. Yet analysis shows that the decision has actually cost the United States over $2 billion, and NC farmers over $1.8 billion dollars directly – and still counting. According to analysis from the Farm Bureau, withdrawing from the TPP has cost North Carolina farm households approximately $37,000 apiece:

Failure on the part of the United States to enact TPP will not see our trade situation maintain the status quo, but will actually see losses in market share and declines in the value of our agricultural trade. (Comments Regarding Effects of Trans-Pacific Partnership on the United States Agricultural Sector, American Farm Bureau Federation)

When the TPP began negotiations in 2009 during the early Obama administration, it was intended to be a free trade agreement between the US and 11 of the countries in the Pacific, most notably Japan (then the 3rd largest economy in the world behind the US and China), Canada, Australia, Vietnam, Mexico, and New Zealand. Trade with these countries represents nearly 44% of US exports and 42% of US agricultural exports. Critically, the trade agreement was designed to blunt Chinese influence, and protect American interests, through trade around the Pacific rim. 

Trump’s withdrawal was part of a broader protectionist trade policy that led his administration to start a trade war with China. The TPP would have made that war far easier to win, with 40% of the world’s economy, including most of China’s major trade partners in the Pacific, putting pressure on Beijing to come to the negotiating table for more favorable terms for American farmers and companies. Without it, America negotiated alone, and from a much weaker position – which was reflected in the result.

Criticism of the TPP withdrawal came from across the political spectrum. The libertarian think tank Cato Institute called the decision “short-sighted” and pointed out the agreement would’ve been a useful diplomatic asset in confronting China, as well as arguing that withdrawal placed the U.S. on the outside of a trade market so lucrative that China, South Korea, and the UK have all made moves to join it.

 Withdrawal from the TPP was the trade equivalent of cutting off one’s nose to spite your face.

Doubling down

Instead, the Trump administration slapped tariffs on China imports. In expected retaliation, China responded in kind, and a trade war developed that cost the US economy billions in export revenues. North Carolina farmers exporting staples like pork, tobacco, soybean, corn and wheat to China suffered huge financial losses

The impact on NC farmers was massive. Based on data from the Farm Bureau, the nearly 2,000 pork farms in NC are still losing $104 million annually from the Trump administration’s withdrawal. To put that sum in perspective, it represents nearly 1% of the total economic value of the NC pork industry, and/or $23,000 per worker. And it’s not just pork – North Carolina soybean farmers are losing $8.3 million a year.

Yet Trump’s trade war made this bad situation even worse yet. After China retaliated against Trump’s tariffs with their own and began buying soybeans from Brazil instead, farmers lost millions more yet in export revenues. The new Chinese tariffs on tobacco cost North Carolina farmers over a quarter of a billion dollars and completely halted the growth of new tobacco exports in the state. 

All told, withdrawal from the TPP directly cost North Carolina’s economy, and its farmers specifically, over $1.8 billion dollars in total revenue since 2017. If one adds in the losses due to Trump’s trade war, the Trump administration wiped out the equivalent of an entire year’s worth of NC agriculture export revenue. 

Round two?

As Donald Trump campaigns for another term in office, he is once again reviving protectionist trade talk. Trump has vowed to institute a new, blanket 10% tariff on all imports entering the United States – kicking off exactly the same trade war cycle as last time.

But this time around, there’s an additional twist. Trump is also vowing a campaign of mass deportations of undocumented workers. For North Carolina farmers, this sort of talk should be chilling. A huge swath of the North Carolina agricultural labor force is made up by undocumented workers, which is just one of the many reasons why mass deportations would be economically catastrophic for the industry, and completely assured to raise food prices for consumers.

With friends like Trump, North Carolina’s farmers hardly need enemies.

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