Six things that could get more expensive for Americans after Trump tariffs

US President Donald Trump has sparked a trade war by imposing tariffs on imports from his country’s neighbours 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.

Trump says he wants to protect American industry, but many economists warn the taxes could lead to prices rising for consumers in the US.

That’s because tariffs are paid by the domestic company importing the goods, who may choose to pass the cost on to customers directly, or to reduce imports which would mean fewer products available.

So what is likely to get more expensive?

Cars are likely to go up in price – by about $3,000 according to TD Economics.

That’s because parts cross the US, Canadian and Mexican borders multiple times before a vehicle is assembled.

As a result of higher taxes paid on the importing of parts to build the cars, it is likely the costs will be passed on to customers.

“Suffice it to say that disrupting these trends through tariffs… would come with significant costs,” said Andrew Foran, an economist at TD Economics.

He added “uninterrupted free trade” in the car-making sector had “existed for decades”, which had led to lower prices for consumers.

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.

Modelo became the number one beer brand in the US in 2023, and remains in the top spot, for now.

It’s more complex when it comes to spirits. The sector has been largely free of tariffs since the 1990s. The industry bodies from the US, Canada and Mexico issued a joint statement in advance of the tariffs being announced saying they were “deeply concerned”.

They say that certain brands, such as Bourbon, Tennessee whiskey, tequila and Canadian whisky are “recognized as distinctive products and can only be produced in their designated countries”.

So given the production of these drinks cannot simply be moved, supplies might be impacted, leading to price rises. The trade bodies also highlighted that many companies own different spirit brands in all three countries.

Imports of Canadian lumber are set to be hit by import tariffs to the US. Trump has said the US has “more lumber than we ever use”.

However, the National Association of Home Builders has urged the president to exempt building materials from the proposed tariffs “because of their harmful effect on housing affordability”.

The industry body has “serious concerns” that the tariffs on lumber could increase the cost of building homes – which are mostly made out wood – and put off building new homes.

“Consumers end up paying for the tariffs in the form of higher home prices,” the NAHB said.

When it comes to the trade war with Canada, the “most obvious” household impact is on the price of Canadian maple syrup, according to Thomas Sampson, associate professor of economics at the London School of Economics.

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.

“That maple syrup is going to become more expensive. And that’s a direct price increase that households will face,” Mr Sampson said.

“If I buy goods that are domestically produced in the US, but that are produced using inputs from Canada, the price of those goods is also going to go up,” he added.

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.

While 25% has been slapped on Canadian goods imported to the US, its energy faces a lower 10% tariff.

Now 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” – i.e. thicker – crude oil from mostly Canada and some from Mexico.

“Many refineries need heavier crude oil to maximize flexibility of gasoline, diesel and jet fuel production,” according to the American Fuel and Petrochemical Manufacturers.

That means 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.

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.

However, with the introduction of new tariffs, the US Agriculture Department has warned that the cost of avocados – along with popular avocado-based dishes like guacamole – could surge, especially by Super Bowl Sunday on 9 February.

Additional reporting by Lucy Acheson