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Six things that could get more expensive for Americans under Trump tariffs Six things that could get more expensive for Americans under Trump tariffs
(5 days later)
Watch: What is a tariff? The BBC's Adam Fleming explainsWatch: What is a tariff? The BBC's Adam Fleming explains
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. US President Donald Trump has imposed a range of tariffs - or import taxes - on billions of dollars worth of goods coming into the US from some of its top trading partners.
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 tariffs apply to steel and aluminium imported to the US, as well as to some other products from Mexico, Canada and China - prompting counter-measures from the latter two countries and the European Union.
The three trade partners have deeply integrated economies and supply chains, with billions of pounds worth of manufactured goods crossing the borders daily. Economists have warned the US tariffs - and those introduced in response by other countries - could put prices up for American consumers.
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, which may choose to pass the cost on to customers, or to reduce imports, meaning fewer products are available.
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 which things could become more expensive?
So what could get more expensive?
CarsCars
Cars will probably go up in price - by about $3,000 according to TD Economics. Some cars are among the products given a temporary reprieve by Trump from a new 25% import tax imposed on Canada and Mexico.
When this ends, cars are expected to go up in price - by about $3,000 (£2,300) according to TD Economics.
That's because parts cross the US, Canadian and Mexican borders multiple times before a vehicle is assembled.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.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. The cost of the higher taxes due on imported components is likely to 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. "Suffice it to say that disrupting these trends through tariffs... would come with significant costs," said TD Economics' Andrew Foran.
He added "uninterrupted free trade" in the car-making sector had "existed for decades", which had led to lower prices for consumers. He argued that the "uninterrupted free trade" which has "existed for decades" in the car-making sector has lowered prices for consumers.
Follow live updates on Trump's tariffs
Trump agrees to pause tariffs on Canada and Mexico What are tariffs and why is Trump using them?
What are tariffs and will prices go up?
Beer, whisky and tequilaBeer, 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.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. However, it's also possible that firms could decide to bring in less foreign beer.
Modelo became the number one beer brand in the US in 2023, and remains in the top spot, for now.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". The picture is more complicated when it comes to spirits, which have been largely free of tariffs since the 1990s.
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". Industry bodies from the US, Canada and Mexico issued a joint statement in advance of the tariffs being announced saying they were "deeply concerned".
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. They argue 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 bodies also highlighted that many companies own different spirit brands in the US, Canada and Mexico.
HousesHouses
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". The US imports about a third of its softwood lumber from Canada each year, and that key building material could be hit by Trump's tariffs.
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". Trump has said the US has "more lumber than we ever use".
However, the National Association of Home Builders urged the president to exempt building materials "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.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."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. Imports from the rest of the world could also be affected.
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 place additional tariffs on most lumber and timber imports, regardless of their country of origin, or create incentives to boost domestic production.
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. Findings are due towards the end of 2025.
Maple syrupMaple 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. The "most obvious" household impact of a trade war with Canada would be on the price of Canadian maple syrup, according to Thomas Sampson from the London School of Economics.
Canada's billion-dollar maple syrup industry accounts for 75% of the world's entire maple syrup production. Canada's billion-dollar 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.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."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. "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 pricesFuel 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. Canada is America's largest foreign supplier of crude oil.
While 25% has been slapped on Canadian goods imported to the US, its energy faces a lower 10% tariff. According to the most recent official trade figures, 61% of oil imported into the US between January and November 2024 came from Canada.
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. While the US has introduced a 25% tariff on most goods imported from Canada, Canadian energy faces a lower rate of 10%.
The US doesn't have a shortage of oil, but its refineries are designed to process so-called "heavier" - or thicker - crude oil, which mostly comes from Canada, with 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."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. That means if Canada decided to reduce crude oil exports in retaliation against US tariffs, it could push up fuel prices.
AvocadosAvocados
One food import that American consumers could see a significant price increase in is avocados. Avocados thrive in in the Mexican climate.
Grown primarily in Mexico due to its warm, humid climate, Mexican avocados make up nearly 90% of the US avocado market each year. Nearly 90% of the avocados consumed in the US come from Mexico.
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. The US Agriculture Department has warned that tariffs on Mexican fruit and vegetables could increase the cost of avocados.
Related dishes like guacamole could also become more expensive.
Additional reporting by Lucy AchesonAdditional reporting by Lucy Acheson