US President Donald Trump has sparked a trade war by imposing tariffs on imports from his country’s neighbors Canada and Mexico. Canada has responded in kind, and Mexico has also said it will retaliate. The three countries have deeply integrated economies and supply chains, with an estimated $2bn (£1.6bn) worth of manufactured goods crossing the borders daily.
Cars: Cars are likely to go up in price – by about $3,000 according to TD Economics. This is because parts cross the US, Canadian, and Mexican borders multiple times before a vehicle is assembled.
Beer, Tennessee whiskey, and tequila: Popular Mexican beers Modelo and Corona could get more expensive for US customers if the American companies importing them pass on the increased import taxes. However, it’s also possible that rather than passing on the cost increase, firms could just import less.
Houses: Imports of Canadian lumber are set to be hit by import tariffs to the US. This could increase the cost of building homes, and put off building new homes. Consumers end up paying for the tariffs in the form of higher home prices.
Maple syrup: When it comes to the trade war with Canada, the “most obvious” household impact is on the price of Canadian maple syrup. Canada’s billion-dollar maple syrup industry accounts for 75% of the world’s entire maple syrup production. The majority of the sweet staple – around 90% – is produced in the province of Quebec, where the world’s sole strategic reserve of maple syrup was set up 24 years ago.
Fuel prices: Canada is America’s largest foreign supplier of crude oil. According to the most recent official trade figures, 61% of oil imported into the US between January and November last year came from Canada. The US doesn’t have a shortage of oil, but the type its refineries are designed to process means it depends on so-called “heavier” crude oil from mostly Canada and some from Mexico. If Canada decided in its retaliation to the US tariffs to reduce crude oil exports, that could lead to prices rising at the gas pumps.
Avocados: One food import that American consumers may see a significant price increase in is avocados. Grown primarily in Mexico due to its warm, humid climate, avocados make up nearly 90% of the US avocado market each year.
Source link