US President Donald Trump has raised tariffs on goods imported from Canada, Mexico, and China, the three largest trading partners of America. Under the new executive orders, all products from Canada and Mexico will be subject to a 25 per cent tariff, except for Canadian energy products, which will face a 10 per cent tariff. A 10 per cent tariff has also been imposed on Chinese goods.
As the new tariffs take effect, experts have warned US consumers will likely face higher prices in the coming months, with costs increasing on everything from fresh produce and alcoholic beverages to gasoline and new cars.
While Trump said that foreign countries would bear most of the burden, experts believed these measures would likely lead to inflationary effects on a wide range of products, ultimately affecting American families' everyday expenses.
"You'd certainly expect to see an impact on prices," Jason Miller, a professor of supply chain management at Michigan State University, told ABC News.
Here's a list of all the products and sectors expected to be affected by Trump's tariffs:
Fresh Produce (Imported from Mexico)
- Avocados
- Tomatoes
- Strawberries
- Other perishable fruits and vegetables (for example, cucumbers, bell peppers, jalapenos, limes, and mangoes)
Nearly three-quarters of US agricultural imports from Mexico consist of vegetables, fruits, and distilled spirits.
Alcoholic Beverages
- Beer
- Tequila
- Other distilled spirits
Meat and Grains (Imported from Canada)
- Beef
- Other meat products
- Grains
Consumers may notice the difference as grocery prices, relatively flat in late 2023 and early 2024, have risen again, particularly for items like eggs.
New Automobiles and Auto Parts
- Finished vehicles
- Engines
- Transmissions
- Auto components (parts from Canada and Mexico)
- Potential price increase for cars and trucks
The US imports billions of dollars worth of finished automobiles, engines, and other components from Mexico and Canada. Tariffs on these goods would add to the already high prices of cars. General Motors, for example, imports nearly 40 per cent of its vehicles from plants in Canada and Mexico.
The effect on car prices is expected to vary depending on the location of vehicle production. Areas in the Midwest, where auto plants rely heavily on parts imported from Canada, could see a more pronounced impact. In contrast, regions with less reliance on Canadian parts may experience a smaller price increase.
"There's just a lot more complexity to understanding increases in prices that consumers could eventually see," Jason Miller of the Michigan State University, told The New York Times.
Gasoline
Prices may rise by 40-70 cents per gallon.
A 10 per cent tariff on Canadian energy, although not the same as initially proposed, could disrupt the US oil and gas industry, which is highly dependent on Canadian oil. With about 60 per cent of US oil imports coming from Canada, experts predict that gas prices could increase by as much as 70 cents per gallon in certain regions.
The combination of tariffs and the seasonal rise in demand for gasoline as warmer weather approaches could lead to price hikes of up to $1 per gallon in some areas by spring.
Consumer Electronics (Imported from China)
- Cellphones
- Computers
- Video game consoles
- Other electronics
Lumber
- Softwood lumber (about 30 per cent imported from Canada)
- Potential rise in housing construction costs
"Tariffs on lumber and other building materials increase the cost of construction and discourage new development, and consumers end up paying for the tariffs in the form of higher home prices," Carl Harris, the chairman of association, said in a statement.
Building Materials (Imported from Canada and Mexico)
- Gypsum (used for drywall)
- Potential increase in construction costs and housing prices
General Supply Chain Disruptions
Increased costs due to tariffs on various goods, leading to higher retail prices for a wide range of products
The tariffs could disrupt a range of industries that rely on cross-border trade. In 2023, Canada and Mexico accounted for nearly $120 billion in US motor vehicle imports, making up about 47 per cent of all such imports. These countries also supply a significant portion of auto parts, making the tariffs a serious concern for the automotive industry.
Robert Lawrence, a professor of trade and investment at Harvard University, told ABC News, "The operations of auto companies on both sides of the border will be hugely affected by these tariffs."
