International trade is complex and one of the least understood components of the globally connected world. Countries from around the world exchange goods and services, allowing each nation to receive products they may not efficiently produce on their own. For example, toys are not manufactured in America. It’s cost prohibitive and retail prices would exceed consumer expectations.
Think of it like a neighborhood market — one family might grow apples, another might bake bread, and a third might sell beef. Instead of each family struggling to produce everything themselves, they trade to get what they need.
On a global scale, this system helps countries specialize in what they do best, leading to better products, lower costs, and stronger economic growth.
International trade promised cheaper goods and economic growth, and it delivered. But for many Americans, international trade came at a severe cost — the loss of good-paying jobs that helped build the middle class. The frustration isn’t just nostalgia; it’s real.
But frustration, when left unchecked, breeds resentment and division. As jobs disappeared and industries shifted, many Americans were left searching for someone to blame. Instead of addressing the root causes — technological change, policy failures, and corporate decisions — populism on both the left and right has turned that frustration outward, fueling outrage at other countries.
However, trade is not just about economics — it also involves politics, regulations, and agreements that can create both opportunities and unexpected tensions between nations.
One example of how regulations impact trade is the lumber industry. In the US, environmental regulations limit how much timber can be harvested, making production more expensive and restrictive. As a result, builders and manufacturers rely on imported lumber, which is often more affordable due to Canada’s vast forests and lax forestry regulations.
When US tariffs on Canadian softwood lumber were imposed in 2017, home builders in North Carolina faced a significant hike in costs, affecting new home construction. The construction industry’s experience is not isolated. Trade wars create a domino effect that reaches far beyond political brinkmanship.
Rather than escalating trade disputes, a smarter approach would be to focus on solutions within our own borders. Instead of disrupting Canadian lumber imports with tariffs, the US could adopt common-sense regulations that allow for more timber harvesting, reducing our reliance on imports while still protecting our forests.
Another path forward is innovation — investing in alternative building materials like engineered wood, recycled composites, or even 3D-printed concrete. These advancements could not only ease supply chain pressures but also make construction more efficient and cost-effective. The move could also trigger an economic boom led by local builders and construction firms.
The trade war between the US, Canada, and Mexico is expanding rapidly. The US imposed a 25% tariff on imports from Canada and Mexico, citing concerns over illegal immigration and drug trafficking. In response, Canada announced its own 25% tariffs on a range of US goods, including lumber.
Trade wars are decided in Washington, but individual states like North Carolina feel the impact the most. North Carolina has a close economic relationship with Canada, with $7.7 billion in annual trade. Canada is the state’s third-largest export market, buying everything from agricultural products to machinery and chemicals.
Agriculture is especially at risk when tensions rise. In 2023, North Carolina exported $398 million in agricultural products to Canada — including about $88 million in fruits, $25 million in sweet potatoes, and $24 million in poultry. When trade restrictions or retaliatory tariffs get implemented, farmers and small businesses — not politicians in Washington — will be the ones absorbing the shock.
Instead of launching indiscriminate trade wars, the focus should be on strengthening partnerships with nations and ensuring that policies support the states and industries most affected by these decisions.
Dr. Michael Walden, economist at North Carolina State University, explains the broader implications: “If, for example, foreign countries increase their tariffs and curtail buying US exported products and services, there can be significant damage to the US economy. US exports account for over $3 trillion of revenue annually for US companies, equal to 10% of total economic activity.”
Trading partners are becoming scapegoats, tariffs are now a rallying cry, and economic anxiety is morphing into isolationist public policy that will do more harm than good. But fear won’t rebuild the middle class. What’s needed is a larger, more compelling vision — one rooted in innovation, private investment, smart public policies, and a commitment to shaping the future rather than clinging to the past.
Trade policies will always play a role in shaping industries, but long-term success comes from adapting, innovating, and making the most of our own resources.