A trade war initiated by US President Donald Trump’s decision to impose tariffs on imports from Canada and Mexico is expected to significantly impact consumers in the US, with price hikes predicted across various goods.
The tariffs, set to take effect on Canadian imports Tuesday, will charge 25% on goods from Canada and 10% on products from Mexico. Both countries have vowed to retaliate, leading to rising tensions between the US and its two largest trade partners.
Trump has justified the tariffs as a measure to protect American industry, particularly manufacturing. However, many economists are warning that the move could increase costs for US consumers. As tariffs are paid by the companies importing goods, they may choose to either pass the additional costs onto consumers or reduce the volume of imports, resulting in fewer products available.
Cars and Automotive Parts The automotive industry is poised to feel the impact. According to TD Economics, the price of cars could rise by approximately $3,000 due to the increased cost of importing parts, which cross US, Canadian, and Mexican borders multiple times before assembly. “Disrupting these trends through tariffs could have significant costs,” said economist Andrew Foran.
Alcohol and Beverages Popular Mexican beers such as Modelo and Corona could become more expensive as US importers pass the tariff costs onto consumers. The spirits industry is also at risk, particularly products like Bourbon, Tennessee whiskey, and tequila, which are produced in specific regions and cannot be easily relocated. The alcohol sector has expressed concerns that tariffs will disrupt supply, leading to price increases.
Housing and Construction Tariffs on Canadian lumber could increase the cost of home construction in the US. The National Association of Home Builders has raised alarms, saying that the tariffs could harm housing affordability and slow the development of new homes. “Consumers end up paying for the tariffs in the form of higher home prices,” the group stated.
Maple Syrup and Avocados Canadian maple syrup is another commodity expected to rise in price, as Canada controls 75% of the world’s maple syrup production. The trade war could result in a direct price increase for households that rely on this popular product.
Meanwhile, avocados, primarily grown in Mexico, may see a price surge as tariffs on Mexican imports are imposed. With avocados making up nearly 90% of the US market, the cost of popular dishes like guacamole could spike, especially around the Super Bowl.
Fuel Prices The energy sector could also be affected. Canada is the largest foreign supplier of crude oil to the US, and although oil imports face a lower 10% tariff, any reduction in Canada’s crude oil exports in retaliation could lead to higher gas prices for US consumers.
As the tariffs move forward, the ripple effects are expected to hit consumers directly, with everyday goods becoming more expensive across multiple sectors.
