The announcement of new tariffs on foreign imports from Mexico, Canada, and China—the country’s three largest trading partners—is making waves.
President Donald Trump proposed these tariffs as a way to pressure these countries on political and economic issues, but in the end, this could mean higher prices for those who shop at the supermarket, fill up their cars, or are thinking about upgrading their cell phones.
What’s Happening?
President Trump has proposed a 25% tariff on products from Mexico and Canada, citing concerns about illegal migration and even drug trafficking.
Additionally, a 10% tariff on Chinese imports is planned, with the administration pointing to issues related to the entry of fentanyl into the United States.
How Could This Affect You?
Whenever new tariffs come into play, businesses must decide whether to absorb the cost or pass it on to consumers.
During his first term, President Trump imposed tariffs on China, and some economic studies found that most of these costs were passed on to American consumers — a scenario we may see again in his second term.
In practice, this means higher prices at supermarkets, car dealerships, and gas stations.
About 60% of the oil imported by the United States comes from Canada. Tariffs on Canadian energy, although lower than on other imports, could lead to price increases at the pump, especially in the Midwest, where refineries process Canadian oil into gasoline and diesel.
When Should You Start Preparing?
The first impacts are expected to be felt in non-durable goods, including groceries. Most avocados in the United States, for example, are imported from Mexico, and they could become more expensive within a few weeks after the tariffs take effect.
It may take longer for prices to rise for durable goods, such as cars, due to existing inventory or if companies expect the tariffs to be temporary.
“It may take some time, but if these tariffs remain, these price increases will eventually happen,” said Felix Tintelnot, associate professor of economics at Duke University.
It is still unclear how quickly businesses are willing and able to raise their prices. While some price increases may be a legitimate response to higher costs for businesses, there is also the risk of opportunistic pricing—meaning that companies could use tariffs as an excuse to raise prices even more than necessary. An increase in inflation is an “inevitable outcome” of tariffs.
Changes Within Our Reach
Even though these changes may seem concerning, some actions can help lessen the impact:
Stay Informed
Keep an eye on news updates about tariffs and how they might affect specific products.
Budget Adjustments
Consider reviewing your monthly budget to account for potential price increases in essential items such as food and basic hygiene products.
Explore Alternatives
Look for locally produced goods or alternative products that may be less affected by tariffs.
Looking Ahead
The situation may still change. Tariffs are not set in stone and can be adjusted or even canceled depending on negotiations between countries.
In the meantime, staying informed and adapting to changes is the best strategy to avoid surprises in your budget. Information is always the best ally for making smart decisions and planning for the future in the best possible way!
