US President Donald Trump has implemented a series of tariffs—import taxes—on billions of dollars’ worth of goods entering the country.
On Wednesday, Trump declared a national economic emergency, announcing that all imported goods would face a minimum tariff of 10%. For nations he considers the “worst offenders,” the tariffs could be as high as 50%. The 10% tariffs are set to take effect on April 5, while the higher rates will be implemented on April 9.
Currently, Canada and Mexico are exempt from these tariffs, though both nations—along with China—were already subject to certain trade restrictions. Additionally, the Trump administration has expanded existing tariffs on steel and aluminum to include beer and empty cans, which could significantly impact Canada and Mexico.
Furthermore, beginning Thursday, a 25% tariff on imported automobiles will be enforced, while tariffs on specific car parts will roll out in May or later.
Economists have cautioned that these tariffs, along with retaliatory measures from other countries, could lead to higher prices for American consumers. The reason is that the tax is levied on the domestic company importing the goods. These businesses may choose to pass the costs onto customers or reduce imports, leading to lower availability of products.
Potential Price Hikes
Automobiles
The US imported approximately eight million vehicles last year, amounting to around $240 billion in trade.
Experts predict that these new tariffs could raise the price of new cars by several thousand dollars. In December, the average price of a new car in the US reached a record $49,738, according to Cox Automotive. Increased demand for used cars may also push their prices up.
Even vehicles manufactured in the US are expected to become more expensive. Many American automakers operate plants in Canada and Mexico, taking advantage of longstanding free trade agreements. Car parts often cross borders multiple times before a vehicle is fully assembled.
Although tariffs on car parts from Canada and Mexico are currently exempt, US customs and border patrol officials are working on a system to assess these duties.
According to the Anderson Economic Group, tariffs on car components from Canada and Mexico alone could raise costs by approximately $4,000 to $10,000, depending on the vehicle. While experts argue that these costs will likely be transferred to consumers, Trump has stated he “couldn’t care less” if prices rise, believing this move will encourage Americans to buy domestically made cars.
Alcoholic Beverages: Beer, Whiskey, and Tequila
Popular Mexican beer brands like Modelo and Corona may become more expensive for American consumers if importers pass on the additional costs.
Modelo and other foreign beer brands will also be affected by the expanded aluminum tariff, which will now apply to canned beer starting April 4. The Beer Institute reports that 64.1% of beer consumed in the US comes from cans.
In a joint statement, representatives from the American, Canadian, and Mexican spirits industries highlighted that beverages such as bourbon, Tennessee whiskey, tequila, and Canadian whisky “can only be produced in their designated countries.”
Since these alcoholic beverages must be made in specific regions, supply shortages could drive up prices.
Trump has also suggested imposing a 200% tariff on European alcohol imports, which could increase the price of Spanish wine, French champagne, and German beer in the US. However, it remains unclear whether this proposal will be enacted.
Housing Costs
A significant portion of the softwood lumber used in US home construction—about one-third—is imported from Canada.
Trump has downplayed concerns, stating that the US has “more lumber than we ever use.”
However, the National Association of Home Builders (NAHB) has voiced serious concerns about how tariffs on lumber could raise home-building costs. Given that most American homes are built using wood, higher lumber prices may deter new construction.
“Consumers end up paying for the tariffs in the form of higher home prices,” the NAHB warned.
Imports from other countries may also be impacted.
On March 1, Trump initiated an investigation into whether additional tariffs should be placed on lumber and timber imports from all nations or whether the US should incentivize domestic production. A report on the findings is expected by late 2025.
Maple Syrup
Canada dominates the global maple syrup market, accounting for 75% of worldwide production.
Around 90% of the syrup is produced in Quebec, which has maintained a strategic reserve for over two decades.
“That maple syrup is going to become more expensive. And that’s a direct price increase that households will face,” said Thomas Sampson of the London School of Economics.
“If I buy goods that are domestically produced in the US, but [which use] inputs from Canada, the price of those goods is also going to go up,” he added.
Fuel Prices
Canada is the largest foreign supplier of crude oil to the US.
Between January and November 2024, 61% of imported oil came from Canada, according to the latest trade data.
Although most imported goods from Canada are subject to a 25% tariff, Canadian energy products face a lower rate of 10%.
While the US has ample oil reserves, its refineries are optimized for processing heavier crude oil, which is primarily sourced from Canada and, to a lesser extent, Mexico.
“Many refineries need heavier crude oil to maximize flexibility of gasoline, diesel and jet fuel production,” the American Fuel and Petrochemical Manufacturers stated.
If Canada retaliates by reducing crude oil exports to the US, fuel prices could rise.
Avocados
Mexico provides nearly 90% of the avocados consumed in the US.
The US Department of Agriculture has warned that tariffs on Mexican fruits and vegetables could drive up the cost of avocados, potentially making dishes like guacamole more expensive.