These items will be more expensive in the US due to the new tariff policy.

(CLO) On Saturday, President Donald Trump imposed high tariffs on three of the United States' largest trading partners: Canada, China, and Mexico, citing a national emergency related to the flow of fentanyl and undocumented immigrants into the country.

This measure, scheduled to take effect on Tuesday (February 4), includes a 25% tariff on all imports from Mexico and most goods from Canada (except for some energy items such as crude oil, which are exempt at 10%).

Specifically for China, the US will impose an additional 10% tariff on goods imported from that country, in addition to various tariffs already imposed, such as 100% on electric vehicles (EVs), 50% on solar panels, and 25% on EV batteries, steel, aluminum, face masks, and some other products.

American consumers will have to spend more on most essential goods in the coming period. (Illustration: Unsplash)

Economists warn that these policies could negatively impact U.S. businesses and consumers, especially as many are still struggling with rising inflation in recent years.

The U.S. Chamber of Commerce warns that tariffs will not solve long-standing border problems and could instead “disrupt supply chains” and increase the cost of living for American families.

Approximately one-third of U.S. imports come from the three countries affected by this decision. Affected products include several essential items that Americans use daily, such as fruits, vegetables, meat, gasoline, automobiles, electronics, toys, clothing, lumber, beer, and wine.

Food

Mexico and Canada play a vital role in the U.S. food supply. Mexico is the largest supplier of fruits and vegetables, while Canada leads in exports of grains, livestock, poultry, and other agricultural products.

Due to the new tariffs, the prices of these products could rise, as grocery retailers have low profit margins and struggle to absorb the additional costs. This could lead to higher food prices for American consumers.

The United States has become increasingly dependent on food imports, particularly from Mexico, due to climate change impacting domestic production. Last year, the U.S. imported $46 billion worth of agricultural products from Mexico, including $9 billion worth of fresh fruit (of which avocados accounted for $3.1 billion), $8.3 billion worth of fresh vegetables, $5.9 billion worth of beer, and $5 billion worth of distilled spirits.

Fuel and energy

Last year, the United States imported $97 billion worth of oil and natural gas from Canada, making it Canada's largest export to its neighbor. Thanks to the expanded Trans Mountain pipeline, the U.S. is increasingly dependent on oil from Canada.

Although the tariff on energy from Canada is only 10%, lower than the 25% on other goods, it could still impact gasoline prices, especially if it lasts through the summer. The biggest impact would be on the Midwest states.

Cars and car parts

Mexico is the largest supplier of automobiles and auto parts to the United States, with total imports last year totaling $87 billion in automobiles and $64 billion in parts (excluding December). Canada also exported $34 billion worth of automobiles to the U.S.

Inflation is projected to rise in the US following President Trump's new import tariff policy. (Illustration: Unsplash)

Mary Lovely, a senior fellow at the Peterson Institute for International Economics, believes the automotive industry could "panic" over the new tariffs. American automakers have kept production costs low by employing cheap labor in Mexico, but the 25% tariff could negate this advantage. Given the significant investments in existing factories, relocating production would be difficult, potentially leading to a substantial increase in car prices.

Steel

Although the United States is no longer a manufacturing-centric economy as it once was, it still consumes tens of millions of tons of steel annually, serving critical industries such as automotive manufacturing, oil, construction, and infrastructure.

Canada and Mexico are two of the three largest suppliers of steel to the United States. During his first term, President Trump imposed a 25% tariff on steel imports from most countries in June 2018, but Mexico and Canada were exempt due to free trade agreements.

Currently, Canada accounts for nearly 25% of U.S. steel imports by weight, while Mexico accounts for about 12%, according to data from the American Iron and Steel Institute.

However, according to economist Won Sohn, there is empirical evidence showing that the 2018 tariffs on steel and aluminum increased production costs, and these costs were ultimately passed on to consumers.

Beer and wine

Beer and spirits may weather economic downturns, but they certainly cannot escape the impact of tariffs. According to the International Trade Administration, in 2023, the United States imported $5.69 billion worth of beer and $4.81 billion worth of spirits from Mexico. The total value of imports of these two items has increased 126% since 2017, making them the 10th largest import category from Mexico last year.

In addition to driving up the prices of raw materials such as steel, aluminum, and grains, tariffs could also lead to retaliatory measures from trading partners in the U.S. beer and wine industry.

Building houses and furniture

Softwood – derived from pine, spruce, fir, and other coniferous trees – is favored for its light weight, ease of work, and high durability. This type of wood has many applications, but most importantly in the U.S. residential construction industry, where it is used for framing, roofing, and siding.

Currently, about 30% of the annual timber used in the United States comes from Canada. Economists and construction experts warn that the U.S. does not have sufficient production capacity to meet domestic demand. Imposing tariffs or restrictions on timber imports from Canada could exacerbate the housing affordability crisis.

Not only lumber is affected, but other building materials are also at risk of tariffs. In 2023, 71% of the $456 million worth of imported lime and gypsum (primarily used for drywall) came from Mexico, according to the National Association of Home Builders (NAHB).

When taking into account imported raw materials from Canada, Mexico, and China – including steel, aluminum, and household goods already subject to tariffs – the NAHB estimates that the new tariffs could increase the cost of imported construction materials by $3 to $4 billion.

Electronics, toys, household appliances

Consumer electronics such as mobile phones, TVs, laptops, game consoles, and the components that power them are among the top items that the U.S. imports from China. China is also a major supplier of household appliances.

Additionally, toys and footwear are items particularly vulnerable to Trump's tariff threats. According to the American Footwear Retailers and Distributors Association, more than half (56%) of shoes sold in the United States are manufactured in China.

The United States also relies on China for toys and sporting goods, importing 75% of these items, including footballs, soccer balls, and baseballs. These products will be heavily impacted by the new tariffs.

Ha Trang (according to UCD, NAHB, CNN)

Source: https://www.congluan.vn/hang-hoa-se-dat-do-hon-o-my-do-thue-quan-moi-tu-thuc-pham-nhien-lieu-den-do-dien-tu-post332730.html