Guest Column: Keep Duty Drawbacks Alive to Protect SC’s Export Engine

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South Carolina has become an economic engine that exports “Made in South Carolina” products across the globe. In 2024 the Palmetto State shipped $38 billion in goods abroad, equating to 11.6% of state GDP and supporting roughly 116,000 jobs throughout the state and growing. Those paychecks flow from port cranes in Charleston to machine shops in the Upstate.

Unfortunately, special interests in Washington, D.C. are lobbying to threaten the Palmetto State’s export economy. A largely unnoticed clause inserted in President Donald Trump’s “One Big Beautiful Bill” (OBBB) would repeal something called duty drawback for specific sectors of our agricultural sector. Duty drawback is a 235-year-old trade incentive that levels the playing field for American exporters. If we allow special interests to chip away at this incentive, it will hobble South Carolina’s ability to grow its regional exports.

Duty drawback ensures that South Carolina producers are not stuck paying tariffs on inputs that ultimately leave the country embedded in finished goods. While it didn’t show up in the Broadway musical, this policy has been around since the time of Alexander Hamilton. Revoking it for one industry today sets a chilling precedent for every exporter tomorrow.

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Troubling for South Carolina’s economy, the specific repeal in the House version of OBBB would impact our state’s economy as it targets the South Carolina agriculture sector.  For farmers in South Carolina, their future depends greatly on the strengths of the export market. Without duty drawback, farmers across our state would be greatly impacted, particularly many African American farmers that are still struggling to stay in business.

It is not just the agricultural sector we should be worried about. Repealing duty drawback could put at risk the jobs of hard-working South Carolinians.

Consider the giants powering South Carolina’s modern manufacturing boom. In Orangeburg and North Charleston, more than 7,000 workers assemble systems for commercial jetliners, defense aircraft, and spacecraft. Just down the road in Ridgeville, over 3,000 employees use imported drivetrains and battery modules to build sedans sold both domestically and abroad. In the Upstate, a turbine plant employing thousands more South Carolinians transforms imported components into high-value exports that generate power around the world.

Some special interest lobbyists are calling duty drawback a “loophole” to justify repealing it. In reality, it’s a tax-neutrality tool that ensures South Carolina exporters aren’t stuck paying duties their foreign competitors don’t, leveling the playing field in global trade. Simply put, duty drawback helps “Made in South Carolina” products compete and succeed around the world.

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Moreover, weakening duty drawback undermines President Trump’s own objective of onshoring critical manufacturing. Federal investments in chips, electric vehicles, and energy technology are designed to pair with duty drawback so companies can manufacture products or grow crops to create value, and jobs, here in South Carolina.

While Congress is taking a hard look at the OBBB and leadership in the United States Senate has removed it from their draft, the House of Representatives must remove the repeal language from the OBBB and reaffirm that America does not hurt South Carolina’s workers and farmers. Our state’s federal delegation led by our esteemed Senators Graham and Scott ought to lead a bipartisan push to protect the duty drawback. And President Trump, with accurate information, will protect American jobs and businesses, including those of our hard-working farmers.

South Carolina has earned its place as the manufacturing powerhouse of the Southeast and we cannot allow Washington special interests to undermine that success. Keep duty drawback protections in place and the duty drawback repeal out of the OBBB. Let the Palmetto State keep driving American competitiveness on the world stage.

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ABOUT THE AUTHOR…

Stephen Gilchrist is Chairman of the South Carolina African American Chamber of Commerce and President Donald J. Trump’s Appointee to the United States Commission on Civil Rights.

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