Goodyear Closes North Carolina Plant Amid Trump Tariffs and Iran War Impact

President Donald Trump’s tariffs and the ongoing conflict with Iran have contributed to the closure of a major North Carolina tire factory, according to recent reports. Goodyear Rubber and Tire Co. announced this week that it will shut down its Fayetteville, North Carolina, plant, which currently employs over 1,700 workers.

The decision to close the plant was framed by company executives as a move to "strengthen Goodyear's ability to compete in today's marketplace and support the long-term health of the business," as reported by City View, a Fayetteville-based news and lifestyle magazine.

However, financial disclosures reveal a stark financial decline. Goodyear reported a $249 million loss in the first three months of 2025, a sharp reversal from the $115 million profit it earned during the same period in 2024—just before Trump’s tariffs were implemented.

In a statement to investors, CEO Mark Stewart cited "higher raw material costs" driven by the war in Iran as a key factor forcing Goodyear to take "meaningful actions to strengthen our cost structure." The closure of the Fayetteville plant appears to be one such action, with 1,700 employees facing job losses.

Tariffs have also played a significant role in Goodyear’s financial struggles. The company expects to receive $46 million in refunds after the Supreme Court ruled Trump’s sweeping "emergency" tariffs unlawful. Even with this refund, Goodyear estimates that inflation and tariffs will contribute to $420 million in economic headwinds for the full year, according to CFO Christina Zamarro’s remarks on an earnings call last week.

Why Tariffs on Rubber Don’t Work

The Trump administration’s tariff strategy has faced criticism for its flawed understanding of global trade. Goodyear’s predicament highlights a critical issue: American tire manufacturers rely entirely on imported rubber, as rubber trees do not grow in the United States.

Rubber is primarily imported from countries like Thailand, which has a climate ideal for rubber tree cultivation and produces far more rubber than its domestic industries can consume. Thailand exports much of its surplus rubber, including to the U.S. However, the Trump administration has targeted such countries with tariffs, arguing that their trade surpluses pose a threat.

In March, the Office of the U.S. Trade Representative claimed that Thailand’s "trade surplus in sectors such as…rubber" justified imposing higher tariffs on those imports. Critics argue this approach is economically misguided.

"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, vibration dampers in bridges, specialized medical equipment, and so on."

This analysis, published by former Assistant U.S. Trade Representative Ed Gresser, underscores the unintended consequences of tariffs on industries dependent on imported raw materials.