 "Robotic arms assemble cars in the production line for Leapmotor's electric vehicles at a factory in Jinhua, Zhejiang province, China, April 26, 2023. (Photo: Reuters)")
US President Donald Trump has followed through on his promise to impose tariffs on Canada, Mexico and China.
Trump said he was doing so to stop the flow of fentanyl and illegal immigrants..
Trump has slapped goods from Mexico and Canada with a tariff of 25 per cent, and items from China with an additional 10 per cent tariff.
However, news has emerged that Trump has paused the tariffs on Mexico after a conversation with Mexico’s President Claudia Sheinbaum.
But which products are set to get more expensive? What do experts say?
Let’s take a closer look:
Which products will get more expensive?
Cars
NDTV reported that finished cars and trucks, engines, transmissions, auto parts would become more expensive.
As per BBC, car prices are set to increase by around $3,000 (Rs 2.6 lakh).
This is because car parts are sent between US, Canada and Mexico several times.
“Suffice it to say that disrupting these trends through tariffs… would come with significant costs,” Andrew Foran, an economist at TD Economics, told the outlet.
Foran said “uninterrupted free trade” had “existed for decades” – which meant consumers paid less.
However, where you live in the US will determine how much you pay.
As per NDTV, areas like the Midwest – which depend heavily on Canada – for auto parts, will be more heavily affected.
“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.
Mary Lovely, a senior fellow at the Peterson Institute for International Economics, told CNN people in the auto sector were likely “apoplectic” about the tariffs.
Fuel and energy
As per CNN, the US in 2023 imported $97 billion worth of oil and fuel from Canada.
Since then, it has only grown more dependent on Canada.
The 10 per cent tariff on fuel is likely to limit the increase in prices – for now.
However, as per NDTV, prices may rise by 40 to 70 cents (Rs 34 to Rs 60) per gallon.
CNN quoted Tom Kloza, global head of energy analysis for OPIS as saying that the US heartland – Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, Montana, Nebraska, North Dakota, Ohio, Pennsylvania, South Dakota and Wisconsin would likely be most affected.
Most of these areas, ironically, voted for Trump.
Avocados and other produce
As per NDTV, avocados, tomatoes, strawberries, cucumbers, bell peppers, jalapenos, limes, and mangoes could all become more expensive.
Vegetable and fruits make up a major part of US agricultural imports.
Booze
Those who favour the tipple will also have to fork more.
As per NDTV, beer, tequila and other distilled spirits will grow more expensive.
As per CNN, Modelo and Corona – two popular Mexican beers – could grow pricier as a result of tariffs.
Modelo in 2023 was the top beer brand in the US.
Steel
As per CNN, the US uses tens of millions of tons of steel per year.
Canada sends nearly a quarter of the steel imported by the US, while Mexico comprises around 12 per cent.
Maple syrup
As per BBC, the price of Canadian maple syrup is set to go way up.
Canada produces 75 per cent of the world’s maple syrup.
Of that, 90 per cent is produced in Quebec.
“That maple syrup is going to become more expensive. And that’s a direct price increase that households will face,” Thomas Sampson, associate professor of economics at the London School of Economics, told BBC.
“If I buy goods that are domestically produced in the US, but that are produced using inputs from Canada, the price of those goods is also going to go up,” he added.
Electronics and toys
As per CNN, the US imports a massive amount of consumers electronics from China.
This includes cellphones, TVs, laptops, video game consoles, monitors and all their component.
The United States gets as much as 75 per cent of its imported toys and sports equipment – footballs, soccer balls and baseballs – from China.
Homes
Homes in the United States are set to get more expensive.
As per BBC, Trump has claimed that the US has “more lumber than we ever use”.
But 30 per cent of softwood lumber – which is absolutely vital to the homebuilding industry in the US – comes from across the border in Canada.
Which is why the National Association of Home Builders (NAHB) has begged Trump to exclude building materials from tariffs “because of their harmful effect on housing affordability”.
“Consumers end up paying for the tariffs in the form of higher home prices,” the NAHB said.
“Whether it’s lumber tariffs or tariffs on any other import, these can impact the supply chain,” Nick Erickson, senior director of housing policy for Housing First Minnesota, told CNN. “And we’ve seen in the past that tariffs on lumber, these are paid for by new homebuyers in the cost of their home.”
Home appliances and footwear
As pe_r CNN,_ China is a major provider of home appliances and footwear.
The Footwear Distributors & Retailers of America told CNN that 99 per cent of shoes sold in America are imported.
Over half of these are made in China.
What do experts say?
They say US citizens can expect to pay more – a lot more.
“Consumers are going to be clearly worse off,” Sung Won Sohn, professor of finance and economics at Loyola Marymount University and chief economist at SS Economics, told CNN.
“When you talk about a tariff, it’s an economic war; and in war, everybody loses,” he added. “But hopefully we will come to some better results and conclusions as a result of the pain and suffering that we will go through.”
Economists warned that heavy US tariffs – and retaliatory measures – could tip Canada and Mexico’s economies into recession, while the United States would face risks of a shallow downturn too.
“The tariffs send a clear message, reinforcing Trump’s America First stance while using trade as a geopolitical tool,” EY chief economist Gregory Daco told AFP.
Markets will view this as heightened political uncertainty while investors brace for inflationary pressures and supply chain disruptions, he said.
“Mexico and Canada could challenge the move under USMCA, while China may counter with targeted restrictions,” Daco said.
A bigger concern, he said, is that the situation could escalate into a prolonged and broader conflict.
With inputs from agencies