2025 Tariffs: Double-Edged Sword for Eastern North Carolina's Manufacturing Renaissance?

In the spring of 2025, as the Biden administration's trade policies give way to the Trump administration's sweeping new tariff initiatives, Eastern North Carolina stands at an economic crossroads. The region—defined by the strategic corridors of Interstate 95 running north-south and the developing Interstate 87 connecting Raleigh to Norfolk—finds itself uniquely positioned to either benefit from or be hindered by the new tariff landscape. For an area already experiencing manufacturing revitalization after decades of decline, the stakes couldn't be higher.

The New Tariff Reality

The tariff policies introduced in early 2025 represent one of the most significant shifts in U.S. trade policy in decades. In April 2025, the administration implemented a baseline 10% tariff on all imports, with higher targeted tariffs on specific countries with which the United States maintains significant trade deficits. Most notably, these include a 25% tariff on automotive imports and an additional 20% tariff on goods from China above the baseline, effectively creating a 30% tariff on Chinese imports.

These tariffs are explicitly intended to revitalize American manufacturing by creating economic incentives for reshoring production facilities to the United States and establishing more domestic supply chains. As President Trump stated when signing the executive order, the policies aim to address what he characterized as "the absence of reciprocity in our trade relationships" and stimulate domestic manufacturing growth.

For Eastern North Carolina, with its rich but challenging manufacturing history, these policies present both significant opportunities and considerable risks as the region navigates this new economic landscape.

Eastern North Carolina's Manufacturing Legacy and Recent Renaissance

Eastern North Carolina's manufacturing story began in the late 19th century, dominated by what became known as the "big three" industries: textiles, furniture, and tobacco. These sectors formed the backbone of the region's economy for generations before experiencing sharp declines beginning in the 1990s as production shifted overseas.

The statistics tell a sobering story: between 1993 and 2022, North Carolina's textile mills and apparel manufacturing sectors experienced employment declines of 85% and 94.4% respectively, while furniture manufacturing employment fell by 59.4%. Many Eastern North Carolina communities that had relied on these industries for generations were left struggling to find new economic footing.

However, in recent years, the region has begun experiencing a manufacturing renaissance, albeit with a different industrial mix than in previous generations. Strategic investments along the I-95 and developing I-87 corridors have brought new advanced manufacturing facilities to the region:

1. The CSX Carolina Connector Intermodal Terminal: Opened in 2021 in Rocky Mount at the intersection of I-95 and future I-87, this $160 million logistics facility features three wide-span, zero-emission electric cranes with an annual capacity of 110,000 containers. The terminal has created hundreds of jobs and is positioning the region as a logistics hub.

2. Pharmaceutical and Biotechnology Manufacturing: Eastern North Carolina has seen significant growth in pharmaceutical manufacturing, with several major facilities established or expanded in recent years along the I-95 corridor.

3. Automotive and Aerospace Supply Chains: The region has attracted advanced manufacturing operations connected to automotive and aerospace industries, drawn by relatively low costs, strategic transportation access, and workforce development programs.

4. Advanced Textiles Revival: While traditional textile manufacturing declined precipitously, specialized technical textile manufacturing for industrial, medical, and military applications has found new growth in the region.

This recent growth has been supported by strategic infrastructure investments, particularly the development of transportation corridors and logistics capabilities. The intersection of I-95 and I-87 creates a "golden zone" for manufacturers seeking efficient access to both north-south and east-west transportation routes.

Potential Benefits of New Tariffs for Eastern NC Manufacturing

The 2025 tariff policies could accelerate Eastern North Carolina's manufacturing renaissance in several key ways:

1. Reshoring Opportunities for Legacy Industries

The region's historical expertise in furniture, textiles, and other manufacturing sectors could provide a foundation for the return of production previously offshored to Asia and other regions. The 30% effective tariff on Chinese imports makes domestic production potentially more economically viable for companies serving the U.S. market.

Eastern North Carolina's advantages for these manufacturers include an existing skill base, cultural familiarity with manufacturing processes, and significantly lower operating costs than major metropolitan areas. Communities that once hosted textile or furniture operations maintain institutional knowledge that could facilitate a smoother return of these industries, albeit in more technologically advanced forms.

2. Strengthened Advanced Manufacturing

The tariffs on automotive parts, electronics, and other advanced manufacturing components could accelerate the trend of "nearshoring" or reshoring production, benefiting existing Eastern North Carolina manufacturers in these sectors while potentially attracting new investment.

The region's strategic location at the intersection of major transportation corridors makes it ideally positioned for manufacturers seeking to serve both domestic and export markets. With two deep-water ports (Wilmington and Norfolk) within easy reach via interstate highways, manufacturers can maintain global connections while benefiting from domestic production.

3. Supply Chain Reconfiguration

The increased costs and uncertainties associated with global supply chains under the new tariff regime may accelerate the trend toward more localized, regional supply networks. Eastern North Carolina stands to benefit as manufacturers seek to establish more resilient domestic supply chains with multiple suppliers in closer proximity.

This trend could create opportunities for smaller manufacturers and suppliers throughout the region to connect with larger operations, creating a more integrated regional manufacturing ecosystem that is less vulnerable to global disruptions.

4. Competitive Advantage Within the United States

Eastern North Carolina maintains significant cost advantages over many other manufacturing regions in the United States, particularly in terms of land costs, energy costs, and labor expenses. As tariffs create more incentives for domestic manufacturing, the region's relative affordability could position it as a preferred location for new facilities.

The existing transportation infrastructure—including I-95, the developing I-87, the CSX intermodal terminal, and proximity to ports—enhances this competitive position, offering manufacturers efficient access to domestic and international markets at lower operating costs than more congested manufacturing hubs.

Challenges and Risks Presented by the New Tariffs

Despite potential benefits, the new tariff policies also present significant challenges and risks for Eastern North Carolina's manufacturing economy:

1. Input Cost Increases and Supply Chain Disruptions

Many Eastern North Carolina manufacturers rely on imported components, raw materials, and production equipment. The broad-based tariffs will increase costs for these inputs, potentially squeezing profit margins and threatening the viability of operations that cannot easily pass increased costs to consumers.

As North Carolina economist Dr. Mike Walden noted in a recent interview, "Automotive, electronics, almost all of our apparel and footwear comes from China. You would see lumber, so housing prices may go up. Appliances—anything with metal in it right now is being hit." These cost increases could prove particularly damaging for manufacturers operating on thin margins or facing significant competition.

2. Retaliatory Tariffs and Export Challenges

Countries targeted by U.S. tariffs have already announced or implemented retaliatory measures, creating new barriers for Eastern North Carolina manufacturers that export products. This is particularly concerning for the region's agricultural processing sector and specialized manufacturing operations that rely on international markets.

China, Canada, and Mexico—all targets of higher U.S. tariffs—collectively represent 45% of North Carolina's international trade. Disruptions to these relationships could create significant challenges for manufacturers throughout the state's supply chains.

3. Transition Costs and Timing Challenges

Even if tariffs ultimately encourage domestic manufacturing, the transition will not happen overnight. As Professor Rob Handfield of NC State University explained, "It's not that simple for an industry to come back to the U.S. once it's been offshored. The transition can take three to five years, probably hundreds of millions of dollars. You have to train people. You have to build a facility... You have to essentially rebuild not just the facility, but the entire supply chain."

During this transition period, Eastern North Carolina manufacturers and consumers will bear higher costs without immediately realizing the potential benefits of increased domestic production.

4. Workforce Development Challenges

The manufacturing sector in Eastern North Carolina has evolved significantly since its heyday, with today's operations requiring higher skill levels and more technical training than previous generations of manufacturing jobs. As noted by the North Carolina Department of Commerce, the percentage of workers with education beyond high school in manufacturing has increased substantially, while the percentage of workers with only a high school degree has declined.

Should tariffs accelerate manufacturing growth in the region, addressing workforce training needs will be critical. The region will need to expand existing workforce development programs to prepare workers for more technologically advanced manufacturing roles.

Specific Impacts on Key Eastern NC Manufacturing Sectors

The diverse manufacturing base in Eastern North Carolina will experience varying impacts from the new tariff policies:

Textiles and Apparel

Once the cornerstone of Eastern North Carolina's economy, textile manufacturing has declined dramatically but maintains a presence, particularly in technical and specialized textiles. With North Carolina still leading the nation in textile manufacturing with 395 establishments employing more than 25,000 workers, the sector remains significant.

The 30% effective tariff on Chinese textile imports could create opportunities for remaining domestic manufacturers, particularly those focusing on technical textiles, advanced materials, and specialized applications where quality and innovation outweigh pure cost considerations. However, textile manufacturers relying on imported fibers, machinery, or components will face higher input costs that could offset potential benefits.

Furniture Manufacturing

Furniture manufacturing in North Carolina declined substantially due to competition from low-cost producers in Asia, particularly China. The 30% effective tariff on Chinese furniture imports could potentially revitalize some domestic production, particularly for higher-end and customized products.

Eastern North Carolina's furniture manufacturing heritage, combined with proximity to both hardwood supplies and major East Coast markets, positions the region to potentially benefit from any reshoring of furniture production. However, the transformation would likely involve more automated, higher-technology production methods rather than a simple return to previous manufacturing approaches.

Automotive Components

The automotive components sector in Eastern North Carolina has grown in recent years as part of the state's broader expansion in this area. The 25% tariff on imported vehicles and automotive parts will significantly impact this sector.

On one hand, higher costs for imported vehicles and components could incentivize more domestic production and potentially benefit Eastern North Carolina manufacturers supplying the industry. On the other hand, disruption to global automotive supply chains could create substantial challenges for existing operations integrated into international production networks.

Pharmaceutical Manufacturing

Eastern North Carolina's growing pharmaceutical manufacturing sector could see mixed impacts from the new tariffs. The industry relies heavily on global supply chains for raw materials, equipment, and components, many of which will now face higher costs.

However, concerns about supply chain security and pharmaceutical independence may accelerate the reshoring of critical drug manufacturing, potentially benefiting the region's existing pharmaceutical cluster. The skilled workforce and existing pharmaceutical manufacturing infrastructure along I-95 positions Eastern North Carolina to potentially capitalize on any broader reshoring trends in this sector.

Food Processing

Eastern North Carolina maintains a substantial food processing sector, particularly for the region's agricultural products. Tariffs on food processing equipment and packaging materials will increase costs for these operations.

Additionally, retaliatory tariffs from trading partners could severely impact export markets for processed food products. However, increased costs for imported food products could create opportunities for domestic producers to gain market share.

Regional Economic Development Strategies in Response to Tariffs

For Eastern North Carolina to maximize potential benefits while mitigating risks from the new tariff environment, regional economic development entities should consider several strategic approaches:

1. Targeted Industry Recruitment

Economic development organizations along the I-95/I-87 corridors should identify specific manufacturing sectors most likely to reshore production due to tariffs and focus recruitment efforts accordingly. Sectors with higher value-added products, significant transportation costs, or critical importance to national security may be particularly promising targets.

The Carolinas Gateway Partnership, NC East Alliance, and other regional economic development organizations are well-positioned to coordinate these efforts, building on existing relationships with manufacturers and site selection consultants.

2. Supply Chain Mapping and Development

Identifying gaps in regional supply chains that could be filled by new or expanded manufacturing operations would help Eastern North Carolina capitalize on reshoring trends. Economic development entities should work with existing manufacturers to map current supply chains and identify opportunities for localization.

The CSX Carolina Connector intermodal terminal in Rocky Mount creates a natural hub around which more integrated supply chains could develop, particularly for industries relying on components from multiple sources.

3. Accelerated Workforce Development

Expanded workforce training programs focused specifically on skills needed for advanced manufacturing will be essential for the region to capitalize on potential growth. Partnerships between community colleges, universities, and manufacturers should be strengthened and expanded.

Programs like the BioWork certificate offered through the North Carolina Community College System provide a model for industry-specific training that could be adapted for other manufacturing sectors experiencing growth due to tariff-induced reshoring.

4. Infrastructure Investment Prioritization

Strategic infrastructure investments, particularly in transportation connectivity, utilities, and industrial sites, will be crucial for accommodating manufacturing growth. The ongoing development of Interstate 87 and improvements to Interstate 95 should be accelerated to enhance the region's logistical advantages.

Additionally, investments in broadband infrastructure, renewable energy, and water/sewer capacity will be important for supporting advanced manufacturing operations with increasingly digital components.

Conclusion: Navigating Uncertainty with Strategic Vision

The 2025 tariff policies create both significant opportunities and substantial challenges for Eastern North Carolina's manufacturing economy. The ultimate impact will depend on how effectively regional leaders, businesses, and economic development organizations navigate this new environment.

With its strategic location at the intersection of major transportation corridors, existing manufacturing expertise, relatively low operating costs, and developing logistics infrastructure, Eastern North Carolina possesses many of the fundamentals needed to benefit from manufacturing reshoring. However, capitalizing on these advantages will require coordinated strategies to address workforce needs, supply chain development, and infrastructure requirements.

For communities along the I-95 and I-87 corridors that have experienced decades of manufacturing decline, the current moment represents a potential turning point. By addressing the challenges while strategically leveraging opportunities, Eastern North Carolina could transform the current tariff-driven disruptions into a catalyst for sustained manufacturing revival—one that creates more resilient, technology-driven operations less vulnerable to future global economic shifts.

The region's manufacturing future will not be a simple return to its past but rather an evolution toward more advanced, sustainable, and competitive industries built on the foundation of its rich industrial heritage. The next few years will determine whether Eastern North Carolina can successfully navigate this transition to emerge as a model for manufacturing revitalization in the twenty-first century.