- Economists say new tariffs could start impacting U.S. prices in a matter of days.
- Prices on U.S. cars and trucks could rise by $3,500 to $12,000 per vehicle.
- Groceries, lumber, electronics and gas could all see price hikes as new levies take effect.
After declining to extend a 30-day pause for new trade levies targeting Canadian and Mexican imports announced last month, tariffs ordered by President Donald Trump that took effect Tuesday are set to impact what consumers pay for a wide range of goods, and some of those price hikes are likely just days away from showing up on checkout receipts.
The new 25% trade tariffs on goods from Canada and Mexico went into effect early Tuesday in a move the president says aims to quell the flow of illegal drugs like fentanyl into the U.S.
The new assessments also include a 10% tariff on Canadian energy products.
On Monday, Trump also ordered an additional round of 10% tariffs on goods from China, adding to the 10% levy the U.S. imposed last month.
Trump circled back on Wednesday with a temporary carveout on his tariff declarations, announcing a new 30-day pause that applies just to automobile imports from Canada and Mexico.
“We spoke with the Big Three auto dealers. We are going to give a one-month exemption on any autos coming through (U.S.-Mexico-Canada Agreement),” Trump said in a statement read by White House press secretary Karoline Leavitt at briefing on Wednesday, according to CNN. Those dealers included Stellantis, Ford and General Motors, which requested the call, she said.
U.S. companies conducted $2.2 trillion worth of import-export business last year and the countries targeted by the president’s new tariffs represent the biggest U.S. trading partners. In 2024, U.S. import-export transactions with Mexico totaled $840 billion, Canada $762 billion and China $582 billion, per a report from The Associated Press.
According to an analysis published last year by the University of Utah’s Kem C. Gardner Policy Institute, Utah companies produced $17.4 billion worth of international exports in 2023 that generated over $4 billion in earnings and directly supported nearly 72,000 jobs. That volume contributed over $8 billion to the state’s gross domestic product and $16.7 billion to the state’s gross output. The state exported goods to 200 countries and imported goods from 151 countries.
While the United Kingdom is, by far, Utah’s biggest export partner, the next three biggest are those targeted by the Trump tariffs — Canada, China and Mexico. The U.K. received $7.2 billion worth of Utah goods in 2023 or 41.2% of total exports. Canada received $1.7 billion in Utah goods in 2023, Mexico $1.3 billion and China $1.2 billion, according to the Gardner report.
Mexico, Canada and China are also Utah’s biggest import origin countries, sending Utah $4.8 billion, $3.1 billion and $2.7 billion worth of goods, respectively, in 2023.
When the Yale University Budget Lab looked at the tariffs that Trump imposed Tuesday on Canada, Mexico and China, it found that inflation would increase a full percentage point, growth would fall by half a percentage point and the average household would lose about $1,600 in disposable income, according a report from The Associated Press.
Here’s a breakdown of select goods that are likely to see the biggest pricing impacts from the new taxes on imports:
Automobiles
The U.S. auto industry is intrinsically dependent on a manufacturing network that spans North American borders, where import-export traffic was previously conducted in a free-trade pact signed by Trump, as well as international sources.
“There’s probably not a vehicle on the market today that wouldn’t be affected in some form or fashion by tariffs,” Peter Nagle, automotive economist for S&P Global Mobility, told CNN. “I would think prices would start to change in the one-to-two weeks after the tariffs go into effect.”
The new trade levies are likely to raise the cost of producing cars throughout North America between $3,500 and $12,000 per vehicle, according to analysis of both public and private data by the Anderson Economic Group, a Michigan-based think tank, per a CNN report.
Food
U.S. grocery stores and restaurants rely heavily on food products imported from both Mexico and Canada. U.S. businesses imported $49 billion in Mexican agricultural products in 2024 and $41 billion in farm products from Canada.
Economists note both the grocery and restaurant industries operate on very slim margins and tariff-driven price hikes are likely to be passed on directly to consumers.
“Grocery stores operate on really tiny margins,” Scott Lincicome, a trade analyst at the libertarian Cato Institute, told AP. “They can’t eat the tariffs ... especially when you talk about things like avocados that basically all of them — 90% — come from Mexico. You’re talking about guacamole tariffs."
Gas
Canada and Mexico are the top two sources of U.S. crude oil imports, representing 52% and 11%, respectively, of total import volume, according to data from the U.S. Energy Information Administration. Last year, the U.S. imported $98 billion in Canadian crude oil and $12 billion from Mexico.
Lincicome told AP that Canadian petroleum output represents the “type of crude oil that American refineries are geared to process” and that the newly assessed tariff on Canadian energy products will be felt at the pump.
“My guess is that it shakes out just through higher gas prices, particularly in the Midwest,” Lincicome said.
Lumber
Nearly a third, 30%, of all softwood lumber products used in the U.S. source from Canadian lumber mills. In 2023, the U.S. imported 28.1 million cubic meters of softwood lumber from Canada, primarily for residential and commercial construction.
In a January report, North Carolina State University researcher and associate professor of forest economics and policy, Rajan Parajuli, said U.S. companies would likely attempt to recoup tariff-related losses by raising the price of Canadian softwood lumber, which would potentially impact the housing market by making building materials more expensive.
“Tariffs unequivocally work towards pushing domestic lumber prices higher. When that happens, it usually adds up to higher costs for consumers,” Parajuli said.
Electronics
Consumer electronics, including cellphones, computers, batteries, televisions and other electronic devices, were among the top imports from China last year, according to Commerce Department data.
The U.S. also imported more than $32 billion in toys, games and sporting goods made in China, representing about 75% of items sold in the U.S. last year as well as more than $7.9 billion in footwear, per Commerce Department data reported by AP.
Tariff-driven changes to the price of imported goods will vary according to how reliant particular U.S. retailers are on products made in countries targeted by the new trade tariffs.
In a CNBC interview Tuesday, Target’s chief commercial officer Rick Gomez said the U.S. retail giant has already reduced its reliance on China to about 30% of imports from more than 60%. It’s on pace to get that number down to below 25% by the end of the next year, Gomez added.