Experts told that impending tariffs on items from Canada and Mexico could increase the cost of groceries and raise petrol prices by up to 70 cents per gallon for some drivers.
On Friday, the Trump administration reaffirmed its intention to impose 25% tariffs on all goods coming from Mexico and Canada on February 1.
According to government data, the nations comprise two of the top three trading partners of the United States.
According to analysts, importers usually pass on a portion of the higher taxes to consumers, so tariffs of this size would probably result in higher pricing for American consumers. The strategy may result in price increases for a variety of goods, including auto parts, tequila, and tomatoes.
Some experts highlighted that since Trump has historically used tariffs as a form of leverage in international negotiations, the price impact may not materialize at all and that companies in the supply chain may choose to shoulder all or part of the tax cost.
According to analysts, the following products may suffer price hikes as a result of the tariffs:
Gas
According to the federal organization U.S. Energy Information Administration, 70% of U.S. imports of crude oil, a vital component of the country’s gasoline supply, come from Mexico and Canada.
According to Timothy Fitzgerald, a professor of business economics at the University of Tennessee who specializes in the petroleum industry, the majority of those imports originate from Canada, which ships crude oil to refineries in the United States designed especially to process the crude and resell it as gasoline fit for automobiles.
Customers in the upper Midwest and some areas along the East and West coasts purchase gasoline that starts as Canadian crude, according to Fitzgerald. Prices for fuel could increase by 40 to 70 cents per gallon for those drivers, he noted.
Fitzgerald went on to say, “You could definitely be looking at 50 cent-a-gallon increases in a lot of parts of the country,” adding that the impact would only be felt in areas that depend on imported petroleum.
Given that demand for gas usually increases as travel picks up in the nicer spring weather, analysts speculated that the tariff-related price increase would be combined with a seasonal price hike that will go into effect in a few weeks.
According to Fitzgerald, if the tariffs are maintained at the start of spring, the seasonal price impact may raise gasoline prices by an additional 30 cents per gallon, bringing the total rise to $1 per gallon.
Avocados and tomatoes
According to data from the U.S. Department of Agriculture, Mexico was the largest supplier of agricultural products in 2023, with $38.5 billion in imports. Fresh fruits and vegetables valued at over $3 billion are among those imports.
A significant portion of the fruits and vegetables that Americans regularly eat are imported from Mexico.
According to USDA figures, around 90% of the avocados consumed in the United States last year came from Mexico. According to Miller, other goods that are heavily imported from Mexico include mangos, limes, tomatoes, cucumbers, bell peppers, and jalapenos.
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He said that if the tariffs went into effect, it would be hard for the United States to replace those commodities with domestic manufacture or an other supplier, so prices would probably go up a lot.
According to experts, the United States also imports a lot of beer, tequila, and other alcoholic beverages from Mexico. According to the USDA, the United States imported over $26 billion worth of alcoholic beverages from Mexico in 2022.
