Six things that could go up in price for Americans after Trump tariffs

US President Donald Trump sparked a trade war by imposing tariffs on imports from its neighbors, Canada and Mexico. This move was intended to protect domestic industries in the US, but many economists have warned that these tariffs could lead to higher prices for American consumers.

Canada has responded with equivalent measures, and Mexico has also stated that it will take retaliatory action. The economies and supply chains of these three countries are highly integrated, with an estimated $2 billion (£1.6 billion) worth of manufactured goods flowing across borders daily. Tariffs are paid by domestic companies on imported goods, and these companies may choose to pass the costs directly to consumers or reduce imports, which would mean fewer products available.

Car prices could rise, with TD Economics estimating an increase of around $3,000. This is because car parts cross the borders of the US, Canada, and Mexico multiple times before assembly. With increased taxes on imported car parts, the costs are likely to be passed on to consumers. Andrew Foerster, an economist at TD Economics, stated, "Disrupting these trends with tariffs will come at a significant cost." He added that the automotive industry has had "uninterrupted free trade for decades," which has led to lower consumer prices.

Popular Mexican beer brands Modelo and Corona could cost American consumers more to purchase if US importing companies pass on the increased import taxes. However, companies may also choose to reduce imports rather than pass on costs. Modelo became the number one beer brand in the US in 2023 and currently remains at the top. The situation is more complex for spirits, which have been largely tariff-free since the 1990s. Industry bodies in the US, Canada, and Mexico issued a joint statement expressing "deep concern" before the tariffs were announced. They stated that certain brands, such as bourbon, Tennessee whiskey, tequila, and Canadian whiskey, are "recognized specialty products that can only be produced in their designated countries."

As the production of these drinks cannot be easily shifted, the supply could be affected, leading to price increases. The industry bodies also highlighted that many companies own different spirit brands across the three countries. Canadian lumber imported into the US will also be affected by import tariffs. Mr. Trump has said that the US has "more lumber than we use." However, the National Association of Home Builders has urged the President to exclude construction materials from the proposed tariffs, "because of their detrimental impact on housing affordability." The industry body is "deeply concerned" that tariffs on lumber could increase the cost of building homes and could deter developers from building new homes. "Consumers will ultimately pay for the tariffs with higher home prices," the National Association of Home Builders stated.

Thomas Sampson, an associate professor of economics at the London School of Economics, believes that the "most obvious" household impact in a trade war with Canada will be the price of Canadian maple syrup. Canada’s multi-billion dollar maple syrup industry accounts for 75% of the world’s total maple syrup production. The majority of this sweet staple - around 90% - is produced in Quebec, where the world’s only strategic reserve of maple syrup was established 24 years ago. "Maple syrup is going to become more expensive. That's a direct price rise that households will face," Mr. Sampson said. "If I buy a good that's produced domestically in the US but that good is produced using inputs from Canada, then the price of that good will also go up," he added.

Canada is the largest foreign supplier of crude oil to the US. According to the latest official trade data, 61% of the oil imported by the US between January and November last year came from Canada. While there is a 25% tariff on Canadian goods being imported into the US, its energy faces a lower 10% tariff. The US is not short of oil now, but the type its refineries are designed to process means it relies on so-called "heavier" - or thicker - crude, mainly from Canada and some from Mexico. US fuel and petrochemical manufacturers have said, "Many refineries require heavier crude to maximize their flexibility in gasoline, diesel, and jet fuel production." This means if Canada decides to reduce crude exports in its retaliation against US tariffs, it could lead to higher prices at the pump.

One food import where US consumers could see a significant price increase is avocados. Avocados are mainly grown in Mexico due to its warm, humid climate, and it accounts for nearly 90% of the US avocado market each year. However, with the introduction of new tariffs, the US Department of Agriculture has warned that the price of avocados, as well as popular avocado dishes like guacamole, could soar, especially ahead of Super Bowl Sunday on February 9. Additional reporting by Lucy Aitchison.