EXCLUSIVE — North Carolina’s Republican senators are the targets of a new lobbying effort to oppose a provision in President Donald Trump’s tax and spending bill that the agriculture industry fears would saddle the tobacco sector with more tariffs.
Our Ag Future, part of the North Carolina Chamber of Commerce, is rolling out a six-figure TV and digital ad campaign first reported by the Washington Examiner urging Republican North Carolina Sens. Thom Tillis and Ted Budd to oppose a repeal of the so-called “duty drawback” in the House’s One Big Beautiful Bill Act.
The policy would take away tobacco’s eligibility under current laws to be refunded for certain tariffs paid on imported materials if they are later exported, destroyed, or used in products that are later exported.
For North Carolina’s multibillion-dollar tobacco industry that relies on exports, groups such as Our Ag Future said the policy would amount to a de facto tax increase of tens of millions of dollars per year on manufacturers and farmers by forgoing refunds on import taxes for products such as cigarette paper, filters, and other components.
Our Ag Future said its monthlong campaign will urge Tillis and Budd “to remove the duty drawback repeal from the reconciliation package in order to protect jobs for North Carolina farmers and their communities.”
“Our state’s farmers are already navigating volatile markets, rising costs, and trade imbalances,” said Ray Starling, North Carolina Chamber of Commerce general counsel. “Duty drawback is a commonsense trade tool that allows American producers to remain competitive in a global marketplace. Repealing it would be a needless, self-inflicted wound on one of North Carolina’s most vital industries and contradict President Trump’s America First agenda.”
Tillis and Budd did not respond to requests for comment.
The legislation was passed by House Republicans last month and currently lies with the GOP-controlled Senate, which is expected to make changes before sending it back to the lower chamber. Congressional Republicans want the bill that advances Trump’s domestic agenda passed by both chambers and sent to Trump’s desk by the July 4 recess.
The lobbying effort is the latest example of the outside pressure lawmakers are facing as they navigate narrow GOP majorities in the House and Senate. In particular, those up for reelection, such as Tillis, will be hit with an added level of targeting. Tillis is not only facing threats of serious potential primary challenges but also from Democrats in the general election in a battleground state that the party is looking to flip.
“Duty drawback is a 2-1 issue in North Carolina and is supported by a vast majority of Trump voters,” said a GOP operative working on midterm election campaigns who was not authorized to speak publicly.
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The operative said repealing the duty drawback “would create unnecessary friction with a base constituency, especially in tobacco-growing counties.”
“We need to turn out to be successful in competitive House races and the U.S. Senate race in North Carolina in 2026 that will determine our congressional majorities,” they said.