Fernando Cervantes Jr.USA TODAY
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After weeks of promising to impose tariffs on its two neighbors, Mexico and Canada, President Donald Trump’s administration will impose tariffs on goods from these countries on Tuesday morning, just after midnight.
"They're going to have to have a tariff. So what they have to do is build their car plants, frankly, and other things in the United States, in which case they have notariffs,"Trumpsaid at the White House on Monday.
Tariffs imposed on goods from Mexico and Canada are expected to increase the prices of goods used by Americans every day. From gas to alcohol to meat and more, economists expect Americans to pay higher prices.
Here is what you need to know.
More: 'No room left': Trump says 25% tariffs on imports from Canada, Mexico begin on Tuesday
A costly endeavor for everyday Americans
According to a Federal Reserve Bank of Atlanta study, the tariffs imposed by Trump “could raise consumer prices on everyday retail purchases, such as food and beverage items and general merchandise, covering about a quarter of the total consumption basket, by 0.81 percent to 1.63 percent.”
The price hikes are expected to impact outside of the grocery store. According to the Peterson Institute for International Economics, the tariffs could cost the average United States household $1,200 annually.
“Domestic producers that compete with the newly tariffed imports will increase their prices in line with import price increases,” the institute said.
On the other hand, the Tax Policy Center said that after-tax income would fall by $930 on average next year. The center said that the lowest-income 20% of households would lower after-tax income by $170 while wealthier households could see an average of $3,280 less in a year.
What items from Canada could be impacted by Trump’s tariffs?
The following common imports from Canada to the U.S., according to the Bureau of Industry and Security and Trading Economics, could be affected by Trump’s tariffs:
- Wood
- Charcoal
- Aluminum
- Iron and steel appliances
- Cereal, flour, starch and milk products
- Rubbers
- Alcoholic beverages
- Carpets and other textile floor coverings
- Wool, animal hair, horsehair yarn and fabric
- Umbrellas, walking-sticks, seat-sticks, whips
- Cotton
- Photographic or cinematographic goods
- Cork products
- Printed books
What items from Mexico could be impacted by Trump’s tariffs?
Items the U.S. imports from Mexico, according to Trading Economics and the OEC, that could be affected by Trump’s tariff plan include:
- Cereals
- Paper products
- Processed fruits and nuts
- Tropical fruits
- Tomatoes, onions, lettuce and cabbage
- Pickled foods
- Fruit juice
- Fertilizers
- Dairy products, eggs and honey
- Cotton
- Beer and hard liquor
- Coffee, tea, mate and spices
- Meat, fish and seafood
- Sauces and seasonings
- Baked goods
- Avocados
- Raw sugar
More expensive food and drinks amid a cost of living crisis
In a poll by the Center for Information & Research on Civic Learning and Engagement at Tufts University, about 40% of voters viewed the economy and jobs as their top issue, finding that young voters prioritizing the economy were more likely to vote for Trump.
Consumer prices increased 3% in January from a year earlier, up from 2.9% the previous month, according to the Labor Department’s consumer price index.
Now, Trump is set to increase prices even further with the tariffs implemented on Tuesday. Canada and Mexico are the United States’ largest trading partners; a significant amount of meat, grains, and vegetables are imported from these countries.
According to the Canadian government, about 34% of all meat imported into the U.S. comes from the country. On the other hand, according to the USDA, Mexico is a major provider of fresh vegetables to the U.S., as 77% of our fresh produce comes from the South.
Mexico and Canada rank within the top four providers of alcohol for Americans. Mexico, in fact, is the largest importer of beer into the United States, as 18% of all beer drank in America comes from Mexico, the U.S. Beer Institute said.
Pricier gas and cars
Trump originally proposed a 10% tariff on Canadian oil, which equates to a roughly 16 cent increase per gallon, according to Mike Skordeles, head of U.S. economics at Truist.
These tariffs could eventually raise the price of almost everything because companies need fuel to transport their products across the country. Retaliatory actions by the three U.S. trade partners are also likely to stir up trouble for American companies.
“This is a mess,” Skordeles said. “There are so many unintended consequences.”
“You might see prices go up not just for new cars but for used ones, too, as any additional scarcity in the market often drives more would-be new shoppers to consider used cars,” Cars.com’s Stef Schrader told USA TODAY. “Cars that depend heavily on imported parts or are fully imported from the affected countries will likely see price hikes first.”
Contributing: USA TODAY's Rachel Barber and Joey Garrison; Reuters
Fernando Cervantes Jr. is a trending news reporter for USA TODAY. Reach him at fernando.cervantes@gannett.com and follow him on X @fern_cerv_.
