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CBS News
06-03-2025
- Business
- CBS News
Trump's tariffs on Canada, Mexico and China are in effect. Here's what could get pricier — and when.
American consumers could soon face higher costs for a range of consumer products after President Trump's tariffs on Canada, Mexico and China went into effect on Tuesday. The 25% tax on imports from Canada and Mexico, plus an additional 10% tax on imports from China, will drive up the costs of an array of consumer goods, from groceries to automobiles, and could cause more financial strain for inflation-weary consumers, experts say. Because importers pay the tariffs — such as Walmart, which imports goods from China and other nations — U.S. businesses will shoulder the added costs. While some companies may opt to swallow all or part of the expense, some of the costs are likely to be passed along to consumers in the form of higher prices, economists say. "If there is a significant increase in tariffs ... those costs will likely be passed onto U.S. consumers and businesses," Brian Peck, executive director of University of Southern California's Center for Transnational Law and Business, told CBS Los Angeles. The typical American family could face higher annual costs of between $1,600 to $2,000 due to the new tariffs, according to a new analysis from the Yale Budget Lab, a nonpartisan public policy research center. What will cost more with tariffs? Products imported directly from Canada, Mexico and China could see price hikes as businesses pass along the tariff costs, either in full or in part, to consumers. But some products that are made in the U.S. but which use imported materials could also see higher prices, such as automobiles that are manufactured domestically but rely on parts imported from Canada, Mexico or China. Consumers could start seeing higher prices for some products fairly quickly, such as gasoline, with some regions expected to see gas prices jump as much as 40 cents per gallon within days, according to GasBuddy energy analyst Patrick De Haan. But other goods, such as cars, might not reflect higher prices for several months, experts say. Vegetables, fruit, beef, beer and spirits The U.S. imported more than $45 billion worth of agricultural products from Mexico in 2023. Almost three-quarters of such imports consisted of vegetables, fruit, beer, tequila and other drinks and spirits, according to the U.S. Department of Agriculture. At the same time, the U.S. imported roughly $40 billion worth of Canadian agricultural products, including beef, pork, grains, potatoes and canola oil, the USDA notes. Subject to 25% tariffs, prices on such products could rise substantially, depending on how much of the cost increase businesses pass along to shoppers. Fresh produce prices could increase by about 3%, while food prices overall may increase by 2%, according to a new analysis from Democrats on Congress' Joint Economic Committee. According to the Atlanta Fed, the tariffs on three key U.S. trading partners would bring up prices on everyday purchases, including food and beverages, by as much as 1.63%, if businesses pass along anywhere from half to all of the added costs to consumers. Electronics The tariffs are likely to drive up prices on a range of consumer goods, including laptops and tablets, video game consoles and smartphones, according to an analysis from the Consumer Technology Association (CTA). Computers, phones and other electronics could see prices jump by 11%, according to the Joint Economic Committee analysis. That's a reality electronics retailer Best Buy acknowledged last year as Mr. Trump spoke about relying on tariffs to achieve his economic goals. Any added costs on U.S. imports from the three counties "will be shared by our customers," Best Buy CEO Corie Barry told investors in the company's Nov. 26 earnings call, noting that "there's very little in [the] consumer electronics space that is not imported." Automobiles Vehicles are expected to be hit hard by the tariffs, given their complex supply chains which can involve car parts crossing borders multiple times over the course of assembly, exposing them to the same levies more than once. The sweeping tariffs could drive up car costs by as much as $12,200 for some models, according to a report from Anderson Economic Group (AEG), a Michigan-based economic consultancy. The price hikes from Mr. Trump's tariffs are likely to be substantial enough that some car buyers might balk at the higher costs, which could dent automobile sales, according to AEG CEO Patrick Anderson. "Our analysis shows the proposed tariffs would have a very big effect on North American assembled cars by multiple automakers," Anderson told CBS MoneyWatch. Some automakers could ditch uneconomical product lines as a result of the tariffs. "It would be a huge disruption to the industry," Anderson said. Gasoline Fuel prices could quickly reflect the new tariffs, according to De Haan of GasBuddy. Oil, natural gas and electricity imported from Canada will be subject to a 10% levy that could lead to higher prices almost immediately for U.S. motorists. "Some U.S. regions will see price impacts rather quickly, while others will see a delay of 1-3 weeks," De Haan wrote in a March 4 blog post. Drivers in the Northeast are likely to see the biggest immediate impact, with gas prices jump by between 20 to 40 cents per gallon by mid-March, he added. "For a typical 15-gallon fill-up, that's an additional $3-$6 every time you visit the pump," he said. Other regions are also likely to see higher gas prices, with Midwest drivers seeing an increase of 5-20 cents per gallon and Great Lakes motorists likely to pay about 10-25 cents per gallon more due to the new tariffs, he added.
CBS News
04-03-2025
- Business
- CBS News
Trump's tariffs on Canada, Mexico and China are in effect. Here's what could get pricer — and when.
American consumers could soon face higher costs for a range of consumer products after President Trump's tariffs on Canada, Mexico and China went into effect on Tuesday. The 25% tax on imports from Canada and Mexico, plus an additional 10% tax on imports from China, will drive up the costs of an array of consumer goods, from groceries to automobiles, and could cause more financial strain for inflation-weary consumers, experts say. Because importers pay the tariffs — such as Walmart, which imports goods from China and other nations — U.S. businesses will shoulder the added costs. While some companies may opt to swallow all or part of the expense, some of the costs are likely to be passed along to consumers in the form of higher prices, economists say. "If there is a significant increase in tariffs ... those costs will likely be passed onto U.S. consumers and businesses," Brian Peck, executive director of University of Southern California's Center for Transnational Law and Business, told CBS Los Angeles. What will cost more with tariffs? Products imported directly from Canada, Mexico and China could see price hikes as businesses pass along the tariff costs, either in full or in part, to consumers. But some products that are made in the U.S. but which use imported materials could also see higher prices, such as automobiles that are manufactured domestically but rely on parts imported from Canada, Mexico or China. Consumers could start seeing higher prices for some products fairly quickly, such as gasoline, with some regions expected to see gas prices jump as much as 40 cents per gallon within days, according to GasBuddy energy analyst Patrick De Haan. But other goods, such as cars, might not reflect higher prices for several months, experts say. Vegetables, fruit, beef, beer and spirits The U.S. imported more than $45 billion worth of agricultural products from Mexico in 2023. Almost three-quarters of such imports consisted of vegetables, fruit, beer, tequila and other drinks and spirits, according to the U.S. Department of Agriculture. At the same time, the U.S. imported roughly $40 billion worth of Canadian agricultural products, including beef, pork, grains, potatoes and canola oil, the USDA notes. Subject to 25% tariffs, prices on such products could rise substantially, depending on how much of the cost increase businesses pass along to shoppers. According to the Atlanta Fed, the tariffs on three key U.S. trading partners would bring up prices on everyday purchases, including food and beverages, by as much as 1.63%, if businesses pass along anywhere from half to all of the added costs to consumers. Electronics The tariffs are likely to drive up prices on a range of consumer goods, including laptops and tablets, video game consoles and smartphones, according to an analysis from the Consumer Technology Association (CTA). That's a reality electronics retailer Best Buy acknowledged last year as Mr. Trump spoke about relying on tariffs to achieve his economic goals. Any added costs on U.S. imports from the three counties "will be shared by our customers," Best Buy CEO Corie Barry told investors in the company's Nov. 26 earnings call, noting that "there's very little in [the] consumer electronics space that is not imported." Automobiles Vehicles are expected to be hit hard by the tariffs, given their complex supply chains which can involve car parts crossing borders multiple times over the course of assembly, exposing them to the same levies more than once. The sweeping tariffs could drive up car costs by as much as $12,200 for some models, according to a report from Anderson Economic Group (AEG), a Michigan-based economic consultancy. The price hikes from Mr. Trump's tariffs are likely to be substantial enough that some car buyers might balk at the higher costs, which could dent automobile sales, according to AEG CEO Patrick Anderson. "Our analysis shows the proposed tariffs would have a very big effect on North American assembled cars by multiple automakers," Anderson told CBS MoneyWatch. Some automakers could ditch uneconomical product lines as a result of the tariffs. "It would be a huge disruption to the industry," Anderson said. Gasoline Fuel prices could quickly reflect the new tariffs, according to De Haan of GasBuddy. Oil, natural gas and electricity imported from Canada will be subject to a 10% levy that could lead to higher prices almost immediately for U.S. motorists. "Some U.S. regions will see price impacts rather quickly, while others will see a delay of 1-3 weeks," De Haan wrote in a March 4 blog post. Drivers in the Northeast are likely to see the biggest immediate impact, with gas prices jump by between 20 to 40 cents per gallon by mid-March, he added. "For a typical 15-gallon fill-up, that's an additional $3-$6 every time you visit the pump," he said. Other regions are also likely to see higher gas prices, with Midwest drivers seeing an increase of 5-20 cents per gallon and Great Lakes motorists likely to pay about 10-25 cents per gallon more due to the new tariffs, he added.
CBS News
31-01-2025
- Business
- CBS News
These products could get more expensive amid Trump's stiff new tariffs on Canada and Mexico
Americans could soon be paying more for everything from automobiles to avocados if the Trump administration proceeds with its plan to slap stiff new tariffs on the nation's three largest trading partners starting Feb. 1. President Trump will impose 25% tariffs on imports from Mexico and Canada starting this weekend, as well as an additional 10% tariff on imports from China, White House spokeswoman Karoline Leavitt said on Friday. While Mr. Trump describes tariffs as import duties that are paid by foreign countries, they are in fact paid directly to the federal government by U.S. businesses, according to the Tax Foundation, a tax-focused think tank. Rather than swallowing the costs, corporations typically hike their prices for those imported goods to recoup all or some of the expense. Who pays the cost? "If there is a significant increase in tariffs ... those costs will likely be passed onto U.S. consumers and businesses," Brian Peck, executive director of University of Southern California's Center for Transnational Law and Business, told CBS Los Angeles. "From Canada, we import oil, lumber, wood and cement," he added. "Over 20% of the agriculture products we bring into the U.S. come from Mexico." One unknown is whether the Trump administration will carve out some exceptions, such as for oil and gas products. Canada provides about 20% of the oil used in the U.S., which means that a 25% tariff on Canadian imports could add 30 to 40 cents a gallon at the pump within days of the new duties taking effect, Patrick De Haan, head of petroleum analysis at GasBuddy, has said. As painful as higher costs might be to U.S. consumers, the biggest impacts would likely be felt by the Canadian and Mexican economies, according to Wendong Zhang, assistant professor of applied economics and policy at Cornell University. A 25% tariff could cause Canada and Mexico to lose 3.6% and 2% of real GDP, respectively, versus a decline of 0.3% for the U.S., Zhang estimated. Here's what could get pricier for American shoppers if the Trump administration's tariffs take effect. Avocados, beef and other foods Inflation-pinched consumers may face a surge in prices for fruits, vegetables and nuts imported from Mexico, including avocados — just in time for the Super Bowl on Feb. 9. The U.S. imported more than $45 billion in agricultural products from Mexico in 2023, including fresh strawberries, raspberries, tomatoes and beef, according to the U.S. Department of Agriculture. The U.S. also imports Mexican beer, tequila and other drinks and spirits. Meanwhile, the U.S. imported about $40 billion of Canadian agricultural products that same year, including beef, pork, grains, potatoes and canola oil, the USDA notes. A 25% tariff could push prices up for all those products. "Grocery stores operate on really tiny margins," said Scott Lincicome, vice president of general economics at the Cato Institute. "They can't eat the tariffs ... especially when you talk about things like avocados that basically all of them — 90% — come from Mexico. You're talking about guacamole tariffs right before the Super Bowl." Cars American consumers are increasingly buying cars that are either built in Canada or Mexico or that use parts imported from those nations. The U.S. imported $69 billion of cars and light trucks from Mexico in 2023, and another $37 billion from Canada, according to S&P Global Mobility. On top of that, about $78 billion in auto parts stemmed from Mexico and $20 billion from Canada. For instance, the engines used in Ford's F-series pickup trucks come from Canada. Because U.S. importers are expected to roll any added tariff costs into vehicle sticker prices, the average U.S. automobile price could jump by about $3,000, TD Economics estimates. That would come at a time when the average new car already sells for $50,000 and the average used car for $26,000, according to Kelley Blue Book. Lumber About one-third of softwood lumber used in the U.S. is imported from Canada each year, according to Rajan Parajuli, an associate professor of forest economics and policy at North Carolina State University. Tacking a 25% tariff on Canadian lumber could cause a "supply shock," the Forest Resources Association, a trade group, wrote in a December blog post. "Regarding lumber, the U.S. still needs Canadian supplies to meet its domestic consumption demand," the group said. Still, the slow U.S. housing market, dampened by mortgage rates that remain close to 7%, could make it hard for companies to pass on the new tariffs through higher lumber prices, some economists said. "Lumber prices are expected to rise, although a slower U.S. housing recovery, burdened by higher prices, will limit the extent to which exporters will be able to pass on price increases," Oxford Economics noted in a Jan. 31 research note.
