US tobacco farmers are growing concerned about both the immediate and long-term economic consequences from the recent tariff war. Photo credit: Indy beetle, CC1.0.
The US-China trade war is expected to weigh heavily on the US economy in particular: the Kiel Institute for the World Economy estimates that inflation is likely to rise by over 5% and exports are likely to slump by almost 17%. The consequences for China itself will also be considerable, though much less severe.
The still-developing trade war is also anticipated to have a significant impact on the broader US nicotine market, hitting consumers; Chinese-made vapes, for instance, are now subject to a 170% tax when they enter the US. Most of the products used to light and cut cigars are imported from China—they now face a 34% reciprocal tariff.
Since China has increased its tariff on US goods as a retaliatory measure from 34% to 84%, US tobacco farmers are growing concerned about both the immediate and long-term economic consequences. According to data from agweb.com, US tobacco and product exports to China were valued at US$242.27 billion in 2024, the vast majority of which came from unmanufactured tobacco.
As China traditionally imports US flue-cured virginia (FCV) to blend with domestic leaf for higher-end cigarettes, its retaliatory tariffs are expected to particularly affect tobacco farmers in North Carolina, and, to a lesser extent, Virginia—the country’s third-largest tobacco-growing state after burley-focused Kentucky.
With a tobacco production volume of 205 million kg in 2023, according to statista.com, and leaf exports worth US$533 million in 2024, North Carolina is the leading US tobacco producer, accounting for 60% of national production. A 2024 report by the John Locke Foundation estimates that the state’s 822 tobacco farms generate US$557 million in revenue and add US$197 million to the state’s GDP.
As farmers plant their crops to meet this year’s contract requirements with China, experts are watching closely, concerned about the outcome of trade negotiations in this “very fluid situation,” as Steve Trommler, commissioner of the North Carolina Department of Agriculture and Trade, put it in an interview with The Carolina Journal.
The state was already disproportionately impacted by the previous trade conflict between the US and China during the first Trump administration, when China dramatically reduced its imports from the US. In 2019 and 2020, China imported 100,000 kg and 0 kg of FCV, respectively, from the US, according to TMA’s Tobacco Trade Barometer. From 2021, imports began returning to pre-trade war levels. By 2023, Chinese FCV imports from the US had reached almost 25 million kg. A repeat of the last trade war—which dealt a blow to North Carolina’s tobacco farmers—is now feared to destabilize the market once again.
As Trump’s tariff policy swings back and forth unpredictably, the situation may still ease for US tobacco growers. In early May, Chinese state media were quoted as saying there would be “no harm” in holding trade talks with the Trump administration, indicating a softening of Beijing’s position as both sides look for a way out of their crushing tariff war. The gesture comes as Trump has signaled interest in trade negotiations—and as the fallout begins to show in China’s economic data, with factory activity in April falling by the most since 2023 as export orders dried up.