Canada, Mexico tariff creates “ripples” on consumer prices

Definitions on Canada and Mexico I entered on Tuesday – They are committed to raising consumer prices, and sometimes in unexpected ways, according to the economists.

Definitions are a tax on foreign imports, which the United States entity pays import a specific commodity.

President Trump on Tuesday Introducing a 25 % tariff on Canada and MexicoThe largest commercial partner in the United States. Trump put a 10 % less tariff on Canadian energy.

Economists said that companies usually pass along some additional cost of definitions on consumers.

Economists said that some products such as fruits and vegetables from Mexico and oil from Canada – which are among its main exports to the United States – will become more expensive as a result.

But there are also long -term effects through supply chains that are not clear.

“The definitions create the effects of ripple that move through complex supply chains in ways that are not always clear,” wrote Travis Toukar, professor of supply chain management at the University of Texas Christianity, in an email.

Toukar said that such dynamics make it difficult to predict the effects of product and minute price.

For example, take the chicken sandwich for fast food. Toukar said that while any of its components may come directly from Canada or Mexico, aluminum chips used in their packages may increase the costs that can be transferred to consumers.

Toukar said that almost everything bought by consumers is transported by trucks fueled by refined oil products – which means that the impact of definitions on Canadian crude oil “can be much broader than it seems at first glance.”

American sources are nearly half of their foreign fuel from Canada, According to To the Peterson Institute for International Economy.

“The costs must eventually pass the supply chain” to the final consumer, “said Mary Le Legm, a older -class colleague at the Peterson Institute for International Economy.

The United States traded $ 1.6 trillion of goods with Canada and Mexico in 2024, which represents more than 30 % of the total American trade, according to the Statistics Office Data As of December.

The customs tariff for Canada and Mexico are expected to cost the average American family of $ 930 in 2026, according to January analysis By the tax policy center in urban areas.

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The typical living family will cost $ 1200 a year after it also represents the customs tariff for China, according to A Piie analysis. (The analysis only considered a 10 % tariff on Chinese imports imposed by Trump in February; another 10 % tariff was placed in place on Tuesday.)

This evaluation said Piie for the influence of the consumer “conservative”.

She said to one of them, he does not treat how local manufacturers would respond to the least foreign competition.

“This customs tariff will increase the price of imported goods,” said Alexander Field, professor of economics at the University of Santa Clara.

He was told, the customs tariff can be in Canada and Mexico Add approximately $ 6000 to the cost of the carAccording to a discretion from Benchmark Co. In February. This dynamic is It is expected to raise car insurance installments.

Douglas Irwin, a professor of economics at Dartmouth College and author of “Subscribe to Trade: History of American Trade Policy,” said.

Brian Cornell, CEO of Target, said The company can force the prices to raise prices on fruits and vegetables Including strawberries, avocado and bananas – within a few days.

Food prices will generally increase by approximately 2 % in the short term, according to the YALE Budget Laboratory analysis From Canada, Mexico and China, customs tariffs. Fresh products rates increase by approximately 3 %.

Building materials are also a large export from Canada – including more than 40 % of US imports of wood products, according to Piie.

“If you are renewing this summer, you are somewhat lucky,” she said.

Lesjam said that the major companies may be in a position that allows them to absorb some of the cost of customs tariffs, rather than transferring everything to consumers. She said that agricultural producers may not be in a position to do so, for example, because there are often “very low margins through the supply chain.”

Toukar said that companies that absorb some cost – to avoid the shock of instant stickers for consumers – means that they have less profit for investing in new equipment, employing workers, or developing new products, which creates “less clear but clear but still important.”

Consumers will also be affected Foreign revenge for American trade – Something committed by officials in Mexico, Canada and China already.

“You do not put these types of definitions in place without expecting revenge, and this is happening now,” said Field.

Canadian Prime Minister Justin Trudeau on Tuesday A 25 % tax announced the US imports of $ 30 billion in Canadian dollarsEffective immediately. He said that the 125 billion US -dollar tariffs in the United States will enter 21 days.

Trump responded to the measures on Tuesday by strengthening the additional customs tariffs in Canada.

Doug Ford, the provincial leader, told Doug Ford, the district leader, that Ontario will impose a 25 % tax on the electricity it exports to 1.5 million homes in Minnesota, Michigan and New York in response to the Trump tariff. Wall Street Magazine.

China has also announced a 15 % revenge tariff targeting US agriculture. The American corn will face a 15 % tax, while soybeans will be hit with a 10 % duty, for example. Mexican President Claudia Shinbom is planning to announce revenge measures on Sunday.