Concerns are mounting that the tariffs imposed by President-elect Donald Trump will lead to higher prices for food and household goods. The U.S. is the world’s largest importer, with Mexico, China, and Canada being the top three suppliers. Canada and Mexico account for about 30% of U.S. trade volume.
On November 25, President-elect Donald Trump announced plans to impose an additional 10% tariff on products from China and 25% tariffs on goods from Canada and Mexico.
Economists are predicting that companies will pass on the additional costs incurred by tariffs to consumers, causing prices of food, clothing, cars, alcohol, and other goods from Mexico, Canada, and China to skyrocket.
According to NBC, consumers are expected to bear an additional burden of about $78 billion a year if such tariffs are imposed.
Newsweek listed the main items affected by tariffs: food, cars and auto parts, electronics, fuel, plastic, machinery and industrial equipment, and aluminum and steel.
Food is the item that will have the most immediate impact on the average consumer. This is because Mexico and Canada export agricultural products to the U.S., including fruits, vegetables, meat, and dairy products. In 2022, Mexican fruits accounted for 51% of U.S. imports of fruits and 69% of vegetables. The share of Canadian fruits and vegetables is 2% and 20%, respectively. The items that are expected to see a price surge due to the imposition of tariffs are avocados, tomatoes, beef, and cheese.
Simon Jung, the CEO of MG Producer, said, “100% of the green onion are from Mexico, and radish, mango, Italian zucchini, tomato, and cilantro are also imported from Mexico depending on the season,” and “Since domestic agricultural products cannot be supplied immediately to the market, the prices will inevitably rise if the new tariff is imposed.”
This year, the expected volume of Canadian beef exports is 595,000 tons, of which about 80% will go to the U.S.
According to the industry, most of the short ribs, a popular choice among Korean Americans, sold in the market are from Canada, while other beef parts are imported from Mexico.
One market industry official said, “The AAA (Choice) grade of Canadian ribs is more competitive in terms of both price and quality compared to American ribs,” and “There has been no price change at the meat wholesaler yet, but we will have to compare prices if the price increases due to the tariff.”
Canada and Mexico are also major suppliers of cars and auto parts. The tariff will add $1,000 to $5,000 to the price of new cars, and the price is expected to rise significantly. The average price of a new car is currently about $48,000. Of the 15.6 million new cars sold in the U.S. last year, about 15% were produced in Mexico and 8% in Canada.
Daniel Roeska, an analyst at Wall Street, said, “The Volkswagen, Stellantis, General Motors, and Ford will be hit hard,” and predicted that “the imposition of tariffs could put the U.S. auto industry in crisis.”
Production of many electronic products, including smartphones, is also highly dependent on Mexico. Mexican tariffs are expected to raise the prices of TVs, laptops, and home appliances.
Some have been critical of Trump’s decision to impose tariffs that imposing high tariffs on other countries could lead to retaliatory tariffs on U.S. exports, which could increase economic costs in other ways.
BY EUNYOUNG LEE, HOONSIK WOO [woo.hoonsik@koreadaily.com]
