Trucks wait to cross the border with the US in Ciudad Juarez,Mexico.

Trucks wait to cross the border with the US in Ciudad Juarez,Mexico.Credit:AP

While Trump on Sunday acknowledged that his new tariffs could cause “some pain”,he has insisted they will not substantially increase prices for Americans and that other countries will bear the brunt.

But trading data and economic studies suggest that consumers in the US will probably see higher prices on a wide range of products such as vegetables,meat,phones and cars. While some companies may opt against passing on the cost of the tariffs,many are likely to raise prices on their products.

“Because of the combination of these three countries,it’s going to be difficult to go down an aisle of a grocery store and not see some sort of inflationary effect,” Jason Miller,a professor of supply chain management at Michigan State University,said.

What should shoppers expect in the grocery aisles?

Fresh produce,much of which is imported from Mexico,is one of the first categories in which shoppers might notice an uptick in prices,potentially within a couple of weeks of the tariffs going into effect. These items – including avocados,tomatoes and strawberries – have a short shelf life. Grocery stores lack substantial inventory,meaning that consumers will quickly find produce that is subject to Trump’s tariffs.

Avocado consumers are set to be smashed by higher costs on the Mexican export.

Avocado consumers are set to be smashed by higher costs on the Mexican export.Credit:AP

Price increases are poised to hit liquor aisles,too,especially beer and tequila. In 2023,nearly three-quarters of US agricultural imports from Mexico consisted of vegetables,fruit,beverages and distilled spirits,according to the US Department of Agriculture.

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The US also imports a range of agricultural products from Canada,including meat and grains. Trump’s 25 per cent tariff on most imports from its northern neighbour could push up retail prices for beef if grocery stores pass the costs on to consumers. Maple syrup could also become pricier.

Canada accounts for roughly 70 per cent of global production and,in 2023,more than 60 per cent of the country’s maple exports went to the US,according to data from the Canadian government.

This added burden comes as many Americans have already been experiencing sticker shock at their supermarkets. Data from the US Labour Department showed that,in December,grocery prices – which were relatively flat in late 2023 and early 2024 – rose again,led by the price of eggs.

Could car prices increase,too?

Yes,the tariffs are widely expected to raise the prices that US consumers pay for new vehicles. That’s because carmakers ship tens of billions of dollars worth of finished vehicles,engines,transmissions and other components each week across the US borders with Canada and Mexico. Billions of dollars more are imported from parts manufacturers in China.

New cars and trucks are already selling for near-record prices. Trump’s tariffs could add to the challenges for consumers looking to buy one.

Car prices are to set rise. GMC Hummer electric vehicles on the production line at General Motors’ assembly plant in Detroit,Michigan.

Car prices are to set rise. GMC Hummer electric vehicles on the production line at General Motors’ assembly plant in Detroit,Michigan.Credit:Bloomberg

General Motors,the largest US carmaker,will probably feel the impact of the tariffs more acutely than other carmakers. GM plants in Canada and Mexico produced nearly 40 per cent of all vehicles the company made last year in North America.

But compared with food,how tariffs affect car prices would probably be more varied,Miller said. Vehicles assembled in states including Michigan,Ohio,Kentucky and Indiana tended to rely heavily on car parts imported from Canada,he said,which was not the case across the board.

“There’s just a lot more complexity to understanding increases in prices that consumers could eventually see,” Miller said.

What other products might be affected?

US drivers,particularly in the Midwest,may see higher prices at the bowser. Trump’s 10 per cent tariff on Canadian energy is not as steep as he initially indicated it would be,and it’s lower than tariffs on other Canadian goods. But the tax nevertheless threatens to disrupt the US oil and gas industry,which is highly dependent on Canadian oil. Roughly 60 per cent of the oil that the US imports comes from Canada.

Analysts expect the additional costs to be borne by a combination of oil producers in Canada and Mexico,US refineries and American consumers. How the tariffs ripple through the market will depend in part on how long they remain in place.

Consumer electronics – among the top goods imported into the US from China last year – could also get more expensive. Shoppers could see prices of goods from mobile phones and computers to video games start to rise within a couple of months.

Another product likely to be affected is lumber,about 30 per cent of which is imported from Canada. Tariffs on softwood lumber could raise the cost of building houses,which risks worsening the housing affordability crisis already weighing on millions of US families. More than 70 per cent of the imports of two essential materials that home builders rely on – softwood lumber and gypsum,which is used for drywall – come from Canada and Mexico,according to the National Association of Home Builders.

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“Tariffs on lumber and other building materials increase the cost of construction and discourage new development,and consumers end up paying for the tariffs in the form of higher home prices,” Carl Harris,chairman of the association,said in a statement on Saturday.

How quickly could prices go up?

That depends on the product. Consumers could see a swift increase in prices for non-durable goods,including groceries. But it could take longer for prices to rise for durable goods,such as cars,thanks to existing inventory or if companies expected the tariffs to be temporary,Felix Tintelnot,an associate professor of economics at Duke University,said.

How quickly firms were willing and able to raise their prices remained to be seen,Peter Simon,an economics professor at Northeastern University,said on Saturday. While some price increases might represent a legitimate response to rising costs for businesses,there was also the risk of opportunistic pricing,meaning companies might use tariffs as an excuse to raise prices even more than necessary,Simon said.

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What about across-the-board inflation?

Analysts at Goldman Sachs have said that if Trump proceeded with across-the-board tariffs,it would both raise prices in the US and slow economic growth. Most economists expect that the fresh trade barriers could lead to a temporary burst of higher inflation.

Inflation has eased back down towards the US Federal Reserve’s 2 per cent target after the central bank raised interest rates aggressively in recent years and kept them at high levels. But the Fed remains alert to anything that could stall progress towards that goal – including Trump’s tariffs.

This article originally appeared inThe New York Times.

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