Mexican avocados. Canadian cherry tomatoes. inexpensive clothing from Temu and Shein in China. At the pump, gas. even the most popular beer in America.
Following President Trump’s announcement of 25% tariffs on goods from Canada and Mexico and 10% on imports from China, economists and market analysts are cautioning that Americans could expect higher prices on a variety of ordinary commodities.
And these are only the items that are probably going to increase rapidly.
In an attempt to mitigate the effects of Trump’s tariffs, manufacturers have been hoarding components and supplies for months. However, it is more difficult to hoard food and the newest technology, so consumers will probably see the effects soon.
Trump stated that “it will all be worth it” to halt the flow of illegal narcotics and migrants into the US and increase domestic production in the US, even if he allowed that consumers could “maybe” feel the pain of the tariffs.
Additionally, experts predict that Canada and Mexico would be particularly heavily hit by the tariffs. For example, whereas American exports to Canada account for only 1% of US GDP, Canadian exports to the US account for 18% of Canada’s economy.
These are some product areas where American customers may expect price rises.
Food—not only avocados
Given that Mexico and Canada are the two biggest suppliers of fruits, vegetables, grain, cattle, meats, and poultry to the United States, consumers should prepare for increased costs in the grocery aisles.
According to the US Agriculture Department, the US imports $3.1 billion worth of avocados from Mexico, accounting for over 80% of its total avocado consumption. By Super Bowl Sunday, guacamole prices are predicted to skyrocket.
In addition, Canada is the United States’ largest supplier of maple syrup and cherry tomatoes, both of which are predicted to increase in price.
Given how frequently these items are imported, the impact at the supermarkets is anticipated to have an immediate negative impact on Americans’ finances.
Gas at the pump
The White House’s proposal for a 10% tax on Canadian crude oil is expected to have a negative impact on the energy sector because the US imports more than $97 billion worth of gas and oil last year, making Canada the leading exporter to the US.
“Someone is going to get kind of hurt” over the oil tariff, according to John LaForge of the Wells Fargo Investment Institute.
Even though the US is a net exporter of oil, Canada supplies 53% of America’s petroleum needs.
Analyst Pavel Molchanov of the financial behemoth Raymond James cautioned that if the price continued to rise and vary by state, Americans would begin to notice an average increase of 10 cents a gallon at the pump.
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Issues at the dealership
According to the US Commerce Department, America imported $87 billion worth of automobiles and an additional $64 billion worth of parts from Mexico last year, which is projected to result in a spike in vehicle prices.
Last year, cars were the second-largest category of commodities that the US imported from Canada. Previously, the US had kept business costs low by investing in industrial facilities both north and south of the border.
The auto industry is furious because there is little alternative except to hike costs at the expense of consumers, according to Mary Lovely, a senior scholar at the Peterson Institute for International Economics, who told CNN that the additional tariffs may effectively negate all the savings that automakers experienced.
Liquor and beer
Although booze is frequently marketed as recession-proof, Chris Carey, an equity analyst at Wells Fargo, has predicted that the tariffs might cause the price of popular Mexican beers to increase by over 4.5%.
That would be a devastating blow to the millions of Americans who enjoy Modelo, which, after the Dylan Mulvaney scandal, surpassed Bud Light as the best-selling beer in 2023, with over $5 billion in sales in the US for the fiscal year 2023–2024.
Approximately $537 million worth of Canadian spirits, including $202.5 million worth of whiskey, are also imported into the US annually.
However, retaliatory taxes from Mexico and Canada, two of the largest importers of American alcohol, are expected to hurt sales of wine and bourbon.
Home appliances and electronics
Prices for toys, appliances, and electronics are probably going to go up for customers as a result of the tariffs on China.
According to the International Trade Commission, China is the world’s largest exporter of smartphones, laptops, TVs, gaming consoles, and all of their component parts, with Beijing importing $146 billion worth of these items in 2023.
The Consumer Technology Association, a trade group, reports that 78% of cellphones, 87% of video game consoles, and 79% of laptops are produced in China.
It appears like the iPhone in particular is going to be a huge success. As of 2023, over 95% of iPhones and other Apple products were still put together in the communist country, despite the fact that other businesses have moved their production out of China.
With $103 billion in revenue in 2023 and roughly one-fifth of all US electronics imports coming from the southern country, Mexico has emerged as the second-largest supplier of electronic goods to the US.
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The tax on toys
The Toy Association, an industry association, claims that over 75% of all toys imported into the US come from China.
The association advised its members to contact members of Congress to voice their concerns about the anticipated hit to the business, calling the tariffs “significantly harmful.”
Toy costs will increase “probably instantly” as a result of the tariffs, according to Jennifer Bergman, owner of West Side Kids in New York City.
Low-cost Chinese clothing and Lululemon leggings
Trump eliminated the so-called “de minimis loophole,” which let shipments of $800 or less to enter the US tax-free, because the tariffs have no exclusions.
The loophole enabled people and small businesses save money by relying on Chinese knockoffs, but it also allowed cheap e-commerce enterprises like Shein and Temu to flourish, shipping directly to American consumers.
During an interview, Shein CEO Donald Tang declined to comment on whether the tariffs will force his company to raise pricing on its popular but ultracheap items.
Antonio Padilla, a fashion blogger, predicts that the tariffs would affect large clothing retailers nationwide, so it’s not just cheap stuff either.
For instance, Canadian-based companies such as After the new tariffs are put into effect, LuluLemon’s products would probably experience a 25% hike, Padilla said.
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A setback for building
Since about 25% of American steel originates from Canada and another 12% comes from Mexico, the American Iron and Steel Institute predicts that the tariffs will also hurt the building sector.
Cutting off Canadian lumber, which makes up 30% of what the US needs, might exacerbate the current housing affordability crisis, the industry has warned.
These concerns are exacerbated by the fact that, according to the National Association of Home Builders, Mexico supplied $4568 million worth of drywall, lime, and gypsum to the United States in 2023.
What Comes Next?
Economists estimate that domestic producers will likely raise their prices to match the foreign imports, meaning the cost to the customer will climb immediately and within days, even though US farms have the ability to step up and lessen the impact of the tariffs at the grocery store.
After Canada and Mexico launched their own tariff war on the US in retaliation for Trump, prices may rise much more.
Canada declared its intention to impose a 25% tariff on $155 billion worth of US goods, such as apparel, shoes, perfume, fruits and fruit juices, vegetables, beer, wine, and bourbon.
According to Canadian Prime Minister Justin Trudeau, Trump has not yet heeded his demands on the tariffs, nor has the president replied to Claudia Sheinbaum Pardo, his Mexican counterpart, who stated that she would shortly publish her own retaliatory duties.
China responded to the tariffs with its own import taxes on pork and soybeans during his first term in office, harming US farmers and requiring the Trump administration to spend billions of public dollars compensating Americans for the reduced prices and missed sales.
North Carolina Growers Association assistant director Lee Wicker expressed his optimism that Trump will once more offer the safety net in the event that Canada and Mexico strike back.
