Former US President Donald Trump, while fulfilling his election promise, has announced a tariff on products imported from Mexico, Canada and China. This tariff has come into effect from 2 February 2025. However, Trump admitted that this step could prove to be expensive for American customers in the short term. The move has been described by US President Trump as an essential step towards making America again great.
How much will tariff rates affect American?
Products imported from Canada and Mexico will be charged 25%. However, energy products coming from Canada will have 10% tariff. Products imported from China will be charged 10 percent. The economist believes that this decision can harm the US economy. This decision will increase the prices of products in the retail. Market experts believe that products used in food products, fuel, cars, liquor, electronics, toys and homes will become expensive.
Food product prices will be affected in America
Mexico and Canada are the largest suppliers of fruits, vegetables, grains, meat and dairy products in American markets. More charges on fruits and vegetables coming from Mexico may increase prices in the US grocery market. The US has imported an agricultural product worth $ 46 billion from Mexico in 2024. This includes fresh vegetables of $ 8.3 billion, beer of $ 5.9 billion and distilled spirits worth $ 5 billion. The prices of avocado, tomato and other fresh fruits will increase.
Fuel and energy
Canada is the largest supplier of oil and gas to the US. In 2024, the US has imported oil and gas of $ 97 billion value from Canada. The new 10% tariffs have affected the US oil and gas industry as 60% of the US oil supply is from Canada. This is expected to increase the prices of petrol and diesel in the US.
Car and car parts
Increased charge on car and car parts to be imported from Canada and Mexico in the US will increase the prices of vehicles. In 2024, the US imported vehicles worth $ 34 billion from Canada and $ 87 billion vehicles and 64 billion vehicles from Mexico. The new tariff policy will lead to a major setback to the American Auto Manufacturing Industry and customers.
Effect on alcohol and beer
The new tariff will also affect the American liquor market. In 2023, the US imported beer of $ 5.69 billion and liquor worth $ 4.81 billion from Mexico. It is possible to increase the prices of Tequila and Beer as Tequila is produced only in Mexico. The prices of major brands such as Modelo, Corona and Casa Noble Tequila may increase by about 4.5%.
Electronics and toys have an impact
Mobile phones, computers and other electronic products imported from China can be expensive. The US imports 75% of its toys and games equipment from China, including football, baseball, and video game equipment.
Home will be expensive
30 percent of the lumber used in home building imports from Canada. Boards are made by processing wood, which is called lumber. Increasing the rate of softwood lumber and gypsum (used to make drywall) will increase the cost of building a house. This will make more expensive to buy a house in America.
What will be the effect on America?
Economists believe that Trump’s tariff policy can negatively impact the US economy. Inflation will increase in America. With this, customers will also have to pay a higher price for basic essential things. However, Trump claims that this step will strengthen the US economy in a long time.
Every taxpayer is going to get relief from the announcement of Finance Minister Nirmala Sitharaman