Another illustration of the flawed logic behind the Trump administration’s tariff strategy: Tires cannot be produced without rubber, and the United States does not cultivate rubber.
Instead of heralding a “Golden Age,” Donald Trump’s tariff strategy and his confrontation with Iran appear to have contributed notably to the shutdown of a North Carolina tire plant.
The Goodyear Rubber and Tire Co. disclosed this week that it will close its Fayetteville, North Carolina facility, which currently employs over 1,700 people. The closure was described as a move to “strengthen Goodyear’s ability to compete in today’s marketplace and support the long-term health of the business,” a spokesperson told City View, a Fayetteville-based publication covering news and lifestyle.
That public-relations phrasing becomes clearer when examining what executives have conveyed to investors.
Goodyear posted a $249 million loss for the first quarter—reversing a $115 million profit in the same period last year, which came just before Trump’s tariffs were announced. Alongside that news, CEO Mark Stewart warned that “rising raw material costs” stemming from the conflict would compel Goodyear to take “meaningful actions to strengthen our cost structure.”
The Fayetteville plant’s 1,700 workers now appear to be at the receiving end of that adjustment—and for them, the change will be meaningful indeed.
Tariffs have represented another substantial blow to Goodyear. The company indicated it expected about $46 million in refunds after the Supreme Court struck down Trump’s sweeping “emergency” tariffs. Even with that refund, inflation and tariff costs would create headwinds that could total as much as $420 million for the year, according to Christina Zamarro, Goodyear’s chief financial officer, during an earnings call last week.
The central issue confronting Goodyear touches on what critics describe as the Trump administration’s flawed take on global trade.
Simply put: you can’t manufacture tires without rubber, and there is no domestic source of rubber in the United States. (Aside from the one at the U.S. Botanic Garden in Washington, D.C.—but it won’t suffice to meet Goodyear’s needs.)
That means American tire manufacturers depend on rubber imports from places like Thailand, a climate well-suited to rubber-tree cultivation and a producer far in excess of its own domestic demand. Thailand, in turn, exports much of this surplus to other regions of the world, including the United States.
Nevertheless, the Trump administration regards other rubber-rich countries as threats to be tackled with tariffs. In March, the Office of the U.S. Trade Representative claimed that Thailand’s “trade surplus in sectors such as…rubber” justified higher duties on those imports.
That stance makes little economic sense.
“Tariffs on natural rubber, no matter how high, won’t bring rubber-tree plantation jobs to Minnesota or North Carolina, but will raise costs and reduce sales for every U.S. manufacturer of airplane and truck tires, bridge vibration dampers, specialized medical equipment, and so on,” wrote Ed Gresser, a former assistant U.S. Trade Representative and now a vice president at the Progressive Policy Institute, in a piece published recently by the institute.
Every tire Goodyear produces in the United States depends on imported raw materials. A number of other American manufacturers are in the same position, which helps explain why more than half of all U.S. imports are raw materials or intermediate goods.
After the tariffs were announced last year, trade journals such as Rubber World warned that consumers would face higher prices on both foreign-made and domestic tires. “While domestic tire producers might enjoy a slight net benefit from reduced competition, they also confront tariffs on the import of raw materials like rubber,” Rubber World explained. “This dual impact could drive up production costs and disrupt supply chains, further complicating market dynamics.”
In short, this is precisely what Goodyear is experiencing—only intensified by a war that is further disrupting essential supply chains.
Tariffs are not a magic solution for creating entirely U.S.-made tires any more than they will generate bananas or cocoa beans domestically. Yet by taxing imports and disrupting global trade (whether through tariffs or war), the Trump administration is making it harder for American manufacturers to compete on the world stage.
Debates about tariffs have raged on the campaign trail, on social media, and in analyses like this one. But the consequences are most evident in places like Fayetteville, where the rubber truly meets the road.
