North Carolina, the top tobacco-producing state in the nation, is facing heightened economic uncertainty as a result of new tariff hikes imposed by the Trump administration, potentially deepening a trade dispute with China and threatening one of the state’s most valuable agricultural sectors.
With more than 260 million pounds of tobacco harvested annually—representing roughly 60% of the nation’s total production—North Carolina plays a dominant role in the U.S. tobacco market. That leadership could now be at risk as international buyers, particularly China, reevaluate imports in light of the growing trade conflict.
State Agriculture Commissioner Steve Troxler acknowledged the challenges facing farmers, noting that many are currently planting to meet existing 2025 contracts with Chinese buyers. “We continue to monitor the trade negotiations very closely,” Troxler said. “The situation remains fluid. But I do give credit to the president for including tobacco in past relief efforts aimed at farmers affected by trade disputes.”
According to data from the U.S. Trade Representative, North Carolina exported $533 million worth of tobacco in 2022, a significant portion of the state’s $5.9 billion in total exports to China in 2024. China, along with Japan and the European Union, has historically been a critical customer for North Carolina’s tobacco crop.
However, analysts warn that history may repeat itself. “When tariffs were imposed during the last trade war, China drastically cut back on U.S. tobacco imports, which caused real hardship for farmers,” said Kelly Lester, a policy analyst at the John Locke Foundation. “If the current tensions escalate further, we could see another sharp drop in demand, lower prices, and serious financial pressure on an industry already facing inflation, labor shortages, and regulatory hurdles.”
The economic footprint of tobacco in North Carolina is significant. The state is home to more than 800 tobacco farms, contributing over $557 million in revenue and $197 million to the state’s GDP, according to a report from the John Locke Foundation. On the manufacturing side, tobacco companies in the state produce $36 billion in output annually, supporting approximately 5,000 jobs and generating $31 billion in GDP. The wholesale sector adds another $15.3 billion in revenue and sustains nearly 4,500 additional jobs.
New tariffs threaten to erode these gains. China recently announced plans to impose a 10% levy on a range of North Carolina exports—including tobacco, fruits, and vegetables—and raised the overall tariff rate on U.S. goods from 34% to 84%, according to media reports.
“China is our top export market and a vital partner for commodities like pork, poultry, tobacco, and lumber,” Troxler said. “We’ve worked hard to build strong trade relationships there and hope they continue.”
State lawmakers are urging patience but caution that short-term impacts may be unavoidable. “Tobacco is a soft target for China because of its economic importance to North Carolina,” said Rep. Jimmy Dixon. “I believe this will be temporary and that China will return to the negotiating table. But in the meantime, it’s going to be a tough period for our farmers. I’m telling people to hang on—it’s going to be a bumpy ride, but I don’t expect it to last long.”
