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Six Things that Could Get More Expensive for Americans Under Trump Tariffs

Consumers in the center aisle of the Grand Central food market. New York Market - Grand Central. (Photo:©Gilles Bizet | Dreamstime.com)

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By Michael Race

March 4, 2025
4:34 pm
Los Angeles, CA

US President Donald Trump has imposed tariffs on Canada and Mexico in a move that threatens to spark a trade war between America and its neighbours. Goods entering the US from Canada and Mexico will now be slapped with a 25% charge. Canada has announced tariffs of its own in response and Mexico has said it will also retaliate to the measures. The three trade partners have deeply integrated economies and supply chains, with an estimated $2bn (£1.6bn) worth of manufactured goods crossing the borders daily. Trump says he wants to protect American industry, but many economists warn such tariffs could lead to prices rising for consumers in the US. That’s because the tax is paid by the domestic company importing the goods, who may choose to pass the

US President Donald Trump has imposed tariffs on Canada and Mexico in a move that threatens to spark a trade war between America and its neighbours.

Goods entering the US from Canada and Mexico will now be slapped with a 25% charge. Canada has announced tariffs of its own in response and Mexico has said it will also retaliate to the measures.

The three trade partners have deeply integrated economies and supply chains, with an estimated $2bn (£1.6bn) worth of manufactured goods crossing the borders daily.

Trump says he wants to protect American industry, but many economists warn such tariffs could lead to prices rising for consumers in the US.

That’s because the tax is paid by the domestic company importing the goods, who may choose to pass the cost on to customers directly, or to reduce imports, which would mean fewer products available.

So what could get more expensive?

Cars
Cars will probably go up in price – by about $3,000 according to TD Economics.

That’s because parts cross the US, Canadian and Mexican borders multiple times before a vehicle is assembled.

Many well-known car brands, including Audi, BMW, Ford, General Motors and Honda trade parts and vehicles across the three countries.

As a result of higher taxes paid on the importing of parts to build the cars, it is likely the costs will be passed on to customers.

“Suffice it to say that disrupting these trends through tariffs… would come with significant costs,” said Andrew Foran, an economist at TD Economics.

He added “uninterrupted free trade” in the car-making sector had “existed for decades”, which had led to lower prices for consumers.

Beer, whisky and tequila

Popular Mexican beers Modelo and Corona could get more expensive for US customers if the American companies importing them pass on the increased import taxes.

However, it’s also possible that rather than passing on the cost increase, firms could just import less.

Modelo became the number one beer brand in the US in 2023, and remains in the top spot, for now.

It’s more complex when it comes to spirits. The sector has been largely free of tariffs since the 1990s. Industry bodies from the US, Canada and Mexico issued a joint statement in advance of the tariffs being announced saying they were “deeply concerned”.

They say that certain brands, such as Bourbon, Tennessee whiskey, tequila and Canadian whisky are “recognized as distinctive products and can only be produced in their designated countries”.

So given the production of these drinks cannot simply be moved, supplies might be impacted, leading to price rises. The trade bodies also highlighted that many companies own different spirit brands in all three countries.

Houses
The US imports about a third of its softwood lumber from Canada each year, and that key building material would be hit by Trump’s suggested tariffs. Trump has said the US has “more lumber than we ever use”.

However, the National Association of Home Builders has urged the president to exempt building materials from the proposed tariffs “because of their harmful effect on housing affordability”.

The industry group has “serious concerns” that the tariffs on lumber could increase the cost of building homes – which are mostly made out of wood in the US – and also put off developers building new homes.

“Consumers end up paying for the tariffs in the form of higher home prices,” the NAHB said.

It’s not just lumber from Canada that could be affected by tariffs.

There is now a second threat looming for most lumber and timber imports into the US, regardless of their country of origin.

On 1 March Trump ordered an investigation into whether the US should either place additional tariffs on most lumber and timber imports, regardless of their country of origin, or create incentives to boost domestic production. Findings are due towards the end of the year.

Maple syrup

When it comes to the trade war with Canada, the “most obvious” household impact would be on the price of Canadian maple syrup, according to Thomas Sampson, associate professor of economics at the London School of Economics.

Canada’s billion-dollar maple syrup industry accounts for 75% of the world’s entire maple syrup production.

The majority of the sweet staple – around 90% – is produced in the province of Quebec, where the world’s sole strategic reserve of maple syrup was set up 24 years ago.

“That maple syrup is going to become more expensive. And that’s a direct price increase that households will face,” Mr Sampson said.

“If I buy goods that are domestically produced in the US, but that are produced using inputs from Canada, the price of those goods is also going to go up,” he added.

Fuel prices
Canada is America’s largest foreign supplier of crude oil. According to the most recent official trade figures, 61% of oil imported into the US between January and November last year came from Canada.

While 25% has been slapped on Canadian goods imported to the US, its energy faces a lower 10% tariff.

Now the US doesn’t have a shortage of oil, but the type its refineries are designed to process means it depends on so-called “heavier” – i.e. thicker – crude oil from mostly Canada and some from Mexico.

“Many refineries need heavier crude oil to maximize flexibility of gasoline, diesel and jet fuel production,” according to the American Fuel and Petrochemical Manufacturers.

That means if Canada decided in retaliation to any US tariffs to reduce crude oil exports, that could lead to prices rising at the petrol pumps.

Avocados

One food import that American consumers could see a significant price increase in is avocados.

Grown primarily in Mexico due to its warm, humid climate, Mexican avocados make up nearly 90% of the US avocado market each year.

However, if tariffs come into force, the US Agriculture Department has warned that the cost of avocados – along with popular avocado-based dishes like guacamole – could surge.