Hold on to your wallets! Prices on everyday essentials could soar within days if former President Donald Trump moves forward with his plan to hit Mexico and Canada with massive tariffs. Experts warn that gas prices could jump by up to 70 cents per gallon, and grocery bills might climb sharply.
Tariffs set to shake up U.S. economy
Trump’s administration has confirmed plans to impose 25% tariffs on all goods from Canada and Mexico starting February 1. These two countries are among America’s biggest trading partners. That means big trouble for U.S. consumers.
When tariffs go up, costs rise. Importers often pass those costs on to shoppers. The impact could hit everything from gasoline to tequila to auto parts.
“The scary thing is the list of products is very, very long,” said Jason Miller, a supply chain expert at Michigan State University.
But the full price impact is still uncertain. Some businesses might absorb part of the costs. Others won’t. Some experts also believe the tariffs could be used as a bargaining chip and might not take effect at all.
A White House spokesperson defended Trump’s economic approach. “President Trump’s first administration put America First with tariffs, tax cuts, deregulation, and energy expansion. He will do it again to bring prosperity back to American workers and industry,” said Kush Desai.
Here’s a breakdown of the possible price hikes:
Gas Prices Could Explode!
Mexico and Canada supply 70% of the crude oil that fuels America’s gas stations. Most of that oil comes from Canada, where U.S. refineries are set up to process it.
Timothy Fitzgerald, a business economics professor at the University of Tennessee, warns that drivers in the Midwest, East Coast, and West Coast could see gas prices jump by 40 to 70 cents per gallon.
“Fifty-cent increases per gallon wouldn’t be surprising,” Fitzgerald said.
And it gets worse. Spring travel season is coming. Gas prices typically rise when the weather warms up. The seasonal increase could add another 30 cents per gallon. That means Americans might pay $1 more per gallon if these tariffs stick around.
Tomatoes, Avocados, and Beer? Get Ready to Pay More!
Mexico is America’s top source for fresh produce. In 2023, the U.S. imported $38.5 billion in agricultural goods from Mexico, including over $3 billion worth of fresh fruits and vegetables.
A whopping 90% of avocados eaten in the U.S. come from Mexico. The same goes for tomatoes, cucumbers, bell peppers, limes, mangos, and jalapenos. Finding new suppliers won’t be easy, and prices could surge.
“You’d certainly expect to see an impact on prices,” Miller warned.
And it’s not just fruits and veggies. The U.S. buys massive amounts of beer and tequila from Mexico. In 2022 alone, Americans imported about $26 billion worth of alcoholic beverages from their southern neighbor.
“Don’t forget all that beer we import from Mexico,” Miller added.
Car Prices in the Fast Lane to Higher Costs!
The auto industry is deeply connected to Canada and Mexico. Tariffs could send car and auto parts prices soaring.
Mexico and Canada are America’s top trading partners for motor vehicles and parts. In 2023, they accounted for nearly $120 billion in car imports, making up almost half of all vehicles brought into the U.S. that year.
Robert Lawrence, a Harvard trade expert, warns that auto companies on both sides of the border will feel the pain.
“The operations of auto companies will be hugely affected,” he said.
With gas, food, and car prices all set to climb, Americans could be in for a costly ride. Stay tuned—this economic storm is just getting started!
