Tariff threats hurt Carolina workers

Daimler Truck North America operates some of North Carolina’s largest manufacturing facilities, including a Freightliner truck plant in Mount Holly, a Freightliner and Western Star plant in Cleveland, a components and logistics center in Gastonia, and a Thomas Built Buses plant in High Point. It employs some 6,800 North Carolinians in the Charlotte area alone.

Make that employed, past tense. In mid-July, Daimler’s footprint shrank by about 600 jobs in our state — and 2,000 across all its North American locations. Company executives hope the layoffs will only be temporary. They are, however, in no position to make it a promise.

Why is Daimler shedding employees in North Carolina and elsewhere? Because sales are trending down, by about 9% according to the company’s current estimate for 2025.

This story isn’t about retail consumers. Daimler mostly sells its trucks and buses to other enterprises, private or public. Right now, many such buyers are hanging onto cash rather than replenishing their vehicle fleets. It’s yet another example of how the Trump administration’s mercurial approach to trade policy is making it difficult for businesses to plan for the future.

“People are just looking for certainty, whether it’s tariffs or any other economic policy,” Daimler Truck North America CEO John O’Leary told Bloomberg Television. “Our customers are kind of in wait-and-see mode, because their end customers — who generate freight moves and, ultimately, freight rates — are also in wait-and-see mode. So everybody is just kind of on the sidelines, waiting for some sign of certainty, and not buying trucks.”

Hiking taxes on imports — or threatening to do so to compel trade concessions from foreign governments — is advertised as a way to create manufacturing jobs within in the US. This is false advertising, however. Taxes on foreign imports won’t do the job because foreign competition doesn’t explain much of the decline in manufacturing employment over the past three decades. Indeed, North Carolina manufacturers produce more output today ($108 billion as of 2023) than in 1997 ($71 billion).

What really happened is that, thanks to technology gains and capital investment, manufacturing is a lot more productive. Daimler employs thousands of people here in North Carolina because its overall operations and supply chain — spanning not just North America but the globe — allow it to make and sell vehicles more efficiently than if it were confined to a single region or country.

One of the most underappreciated facts about North Carolina’s 21st century economy is that vehicle manufacturing is one of its mainstays. Those who think otherwise are inordinately focused on a single subcategory: final assembly of passenger cars. No, we don’t make the Chevy Silverado or Toyota Camry in North Carolina. But the vehicle business is far bigger than that. Its finished goods include trucks, buses, trains, planes, and agricultural vehicles. And its inputs span a mindboggling array of metallic components, machine parts, plastics, textiles, controls, software, and other intermediate goods.

Some two decades ago, North Carolina State University economist Mike Walden pointed outthat our state’s traditional Big Three industries — tobacco, furniture/wood products, and textiles/apparel — had given way to a Big Five of food processing, technology, chemicals/pharmaceuticals, financial services, and vehicle parts.

In total, North Carolina’s vehicle manufacturers and related enterprises produced about $8 billion worth of goods in 2023. While that sum vastly exceeds the output of either furniture and wood products ($2.4 billion) or textiles and apparel ($2.6 billion), far too few North Carolinians appear to be aware of the role the vehicle sector plays in our economy.

And while some domestic manufacturers clearly benefit from protectionism, most don’t. Tariffs threaten to disrupt the customer base and supply chains that sustain thousands of jobs here in our own state. Not only will tariffs not bring back the huge apparel and furniture plants that once employed many blue-collar workers (including my own ancestors), but they are costing North Carolinians jobs right now. For their sake, it’s time to bring this madness to a swift end.

John Hood is a John Locke Foundation board member. His books Mountain Folk, Forest Folk, and Water Folk combine epic fantasy and American history.