A major automotive CEO’s blunt assessment — “tariffs are hurting” — landed with particular weight in Upstate South Carolina, where the manufacturing economy built around BMW, Michelin, and a dense network of automotive suppliers is navigating some of the steepest cost pressures in a generation. Since April 2025, a 25 percent tariff on imported vehicles and tariffs on parts have cost the global auto industry an estimated $35.4 billion, according to an Automotive News analysis of financial reports.
BMW’s Spartanburg plant — the company’s largest global production facility — sits at the center of this exposure. The automaker faces duties on components imported from overseas suppliers, while also contending with tariffs on Chinese-made electric vehicles exported to European markets. BMW CEO Oliver Zipse has publicly said tariff concerns are “way exaggerated,” but analysts estimate the company could absorb up to €1.5 billion in tariff-related costs this year alone. The Spartanburg plant, which exported approximately 225,000 vehicles worth $10 billion in 2024, has been cited as the company’s key advantage in navigating U.S. policy through domestic production.
The South Carolina House of Representatives passed a resolution earlier this year urging the president to end tariffs specifically because of BMW’s $14.8 billion investment in Spartanburg and its status as the largest automotive exporter by value in the United States. The resolution noted that BMW is in the midst of a $1.7 billion expansion to assemble electric vehicles in Spartanburg and build a new high-voltage battery plant in Woodruff.
Beyond BMW, Michelin North America, ZF Transmissions, Plastic Omnium, and hundreds of other Upstate suppliers face their own tariff calculations. Some are accelerating domestic sourcing to reduce exposure; others are absorbing short-term cost increases while watching for policy relief. The broader tariff environment has already pushed average vehicle prices up by more than 10 percent according to Kelley Blue Book data, compressing margins across the supply chain.
For Spartanburg County — where manufacturing accounts for a significant share of the county’s employment base and tax revenue — the stakes extend beyond any single company. OneSpartanburg Inc. and county economic development officials are monitoring capital investment decisions closely, as sustained tariff uncertainty makes long-range factory expansion planning more complicated. The coming months will test whether the Upstate’s manufacturing belt can absorb this cost environment or whether investment timelines begin to shift.
What’s Happening in Spartanburg
- Which Upstate SC industries are most affected by tariffs?
Automotive and manufacturing sectors — led by BMW and Michelin — face the heaviest exposure, as they import significant parts and raw materials subject to new tariff rates. - How are local businesses responding to tariff pressure?
Some suppliers are accelerating domestic sourcing deals while others are absorbing short-term cost increases, hoping for policy relief before passing costs to consumers. - What is the broader economic picture for Upstate SC?
Upstate SC’s manufacturing belt accounts for tens of thousands of jobs; economists say a sustained tariff environment could slow hiring and capital investment in the region.
