Imported tariffs on Mexico, China and Canada: Higher costs for Americans

Imported tariffs on Mexico, China and Canada: Higher costs for Americans

American consumers and companies must expect considerable costs caused by the tariffs introduced by President Donald Trump on the country's three most important trading partners. With just a minimal exception for some Canadian energy products, all imports of the United States from these three countries are subject to at least 20 % in the case of China and 25 % for Mexico and Canada.

price increase through tariffs

The Americans will not immediately feel the effects of tariffs, but import taxes could drive up the prices for almost everything, especially since over 40 % of the goods that imported the United States last year came from the countries that Trump has targeted. How high the prices will ultimately increase and when this happens depends on the extent to which companies cover the higher customs costs or adapt their supply chains to minimize the costs, as well as the amount of the existing inventory.

Food prices in focus

Mexico and Canada provide a significant share of various important food categories. For example, Mexico is the largest supplier of fruit and vegetables to the United States, while Canada is a leader in the exports of grain, cattle and meat. Agricultural products from Mexico and Canada in particular could become more expensive for consumers, since food dealers usually work with lower profit margins than most other industries. With little scope to absorb higher customs costs, retailers could be forced to pass them on to consumers.

The CEO of Target, Brian Cornell, expressed in a Interview with CNBC that the company could force the company to do the prices for fruit and vegetables To increase week. Cornell explained that Target Stark on Mexican fruit imports in winter.

import statistics and dependencies

Although the United States typically exports more agricultural goods than they import, the value of imports has risen faster in the past decade than that of exports, according to the US Agricultural Ministry . In addition, climate change has increased the US dependency of countries such as Mexico, in which are .

Last year, the USA imported the value of $ 46 billion in agricultural products from Mexico, including fresh vegetables worth $ 8.3 billion, $ 5.9 billion for beer and $ 5 billion for spirits. However, the largest position among agricultural imports from Mexico was fresh fruit, the value of which was $ 9 billion, with Avocados being $ 3.1 billion.

In addition to the tariffs on Mexico, Canada and China, Trump also brought the idea of ​​a separate customs on agricultural imports into play on Monday, which could further increase the prices for food from these countries and worldwide.

Effects on electronics and toys

Among the most important import goods from China are consumer electronics such as cell phones, televisions, laptops, video game consoles, monitors and all corresponding components. China is also an important supplier of household appliances. These together with toys and shoes are particularly affected by Trumps customs threats.

impressive 99 % of the shoes sold in the USA are imported, according to the footwear Distributors & Retailers of America, a trade organization that represents brands like Nike, Steve Madden and Cole Haan. More than half (56 %) of the shoes sold in the USA come from China.

The USA also depends on China for toys and sports equipment, including articles such as footballs and basket balls. 75 % of imported toys and sports equipment come from China.

general effects on the automotive industry

cars that are sold in America are no longer exclusively American production. In many cases, parts cross the boundaries between Mexico and Canada several times before a car is completed - either in the USA or a neighboring country. Car manufacturers have set up factories in North America while it was previously a free trade zone.

"There is probably no vehicle on today's market that will not be affected in any form of tariffs," said Peter Nagle, automotive economist at S&P Global Mobility, in a Interview with CNN . "I assume that the prices will increase in one to two weeks after the tariffs come into force." According to an analysis of public and private data, the costs for the production of cars across North America will increase between $ 3,500 and $ 12,000. Since it will not be profitable to produce some models at the higher costs, especially those with cheaper equipment, production cuts and job losses in the industry are very likely, said Patrick Anderson, CEO of the group.

"Producers will stop producing some of the models ," forecast Anderson. He pointed out that Trump's proposal, and automotive manufacturers would quickly move production back to the USA, was not realistic. That is a costly affair that could take years.

The reporting of CNN was supported by Alicia Wallace and Chris Isidore.