Cars, avocados and tequila could cost more under Trump’s proposed tariffs
- Share via
Monday sent the U.S. hurtling on a economic roller coaster as President Trump threatened to impose steep tariffs on goods imported from China, Canada and Mexico on Tuesday.
By late Monday, however, Mexico and Canada had struck last-minute deals with the president to delay the tariffs by one month, a welcome relief to industries in California heavily dependent on trade with those countries.
Trump declared an economic emergency over the weekend and signed executive orders to place duties of 10% on all imports from China and 25% on imports from Canada and Mexico. Energy imports from Canada, including oil and natural gas, would only be subject to a 10% tax.
Mexico President Claudia Sheinbaum announced Monday on X that she had agreed to send 10,000 members of the country’s national guard to the northern border in exchange for delaying the tariffs by one month. The deployment is meant to bolster Mexico’s efforts to stem the flow of illegal drugs into the United States.
“Proposed tariffs will be paused for at least 30 days while we work together,” Canadian Prime Minister Justin Trudeau posted Monday afternoon on X.
Although Trump’s unpredictability makes it difficult to pin down what the coming days and weeks will hold, the effect of the proposed tariffs on consumer price increases could be significant, said economist Chris Thornberg, founding partner of Beacon Economics in Los Angeles.
“We just don’t know how serious he is and how far he will take this,” Thornberg said. “If it happens, you won’t see the impact on prices on Wednesday. It’s going to take some time for things to work through the system.”
Here are the goods that could be affected the most:
Autos and parts
The U.S. relies heavily on foreign partners for cars and car parts, making the automobile industry particularly vulnerable to price increases under the new tariffs. Most cars sold in the U.S. are built in Mexico or Canada or use parts imported from those countries.
“Our automobile supply chains are highly integrated with Canada and Mexico,” Thornberg said. “This would cause a conniption in those supply chains.”
Eighty-eight percent of vehicles produced in Mexico are exported, with 76% headed for the U.S., according to the International Trade Administration. Automakers with manufacturing operations in Mexico include General Motors, Ford, Tesla and others.
Thornberg estimated the price of cars could increase by 5% if Trump’s tariffs go into effect, while TD Economics has predicted a $3,000 jump in the average car price.
Gas prices could rise as well — the U.S. imported 4.3 million barrels of Canadian crude oil per day in July, according to the U.S. Energy Information Administration.
“We import a large amount of oil and energy from Canada, and that’s one of those things that can immediately be felt at the price of the pump,” said Clement Bohr, an economist and author of the UCLA Anderson Forecast quarterly national outlook.
President Trump announced sweeping tariffs on goods imported from Mexico, Canada and China, triggering a trade war and raising fears about consumer costs.
Avocados and other produce
With the vast majority of produce imports coming from the two countries Trump is targeting with the highest tariffs, grocery prices will almost certainly rise.
The U.S. spent $88 billion on agricultural imports from Mexico and Canada in fiscal year 2024, including avocados, cucumbers, potatoes and more. Producers will probably pass on the cost of tariffs to consumers, driving up prices for popular dishes such as french fries and guacamole.
“Our food systems are clearly going to be impacted by this, and food prices will probably go up more so than most goods,” Thornberg said. Price increases could come as many Americans are already wary of expensive groceries and meals.
The U.S. imported more than 2.7 billion pounds of avocados from foreign partners and spent $1.7 billion on prepared potato products from Canada in 2023. That year, farm imports from Canada reached $40 billion and those from Mexico totaled $45 billion.
Household electronics and appliances
Essential household products such as air conditioners and washing machines could become more expensive under Trump’s proposed taxes. The U.S. imports a “tremendous” amount of heating and cooling equipment from Mexico, Thornberg said.
The U.S. imported $76 billion worth of electronics from Mexico in 2023 and also relies on China for the production of many consumer electronics, including cellphones, televisions and computers. More than a quarter of U.S. imports from China in 2023 consisted of electronic equipment.
Beef and cow products
Mexican and Canadian cattle historically make up the majority of beef imports in the U.S., meaning beef prices will probably be affected by the tariffs. Foreign beef saw a surge in the first half of 2024 from Mexico due to a decrease in U.S. cattle, with over 1 million head of cattle imported.
Between 2013 and 2023, Canada provided over half of the U.S.’s imported fresh and chilled meat; Mexico provided about 34% during the same period, according to the U.S. Department of Agriculture.
Tequila
Demand for Mexican tequila recently topped U.S. distilled spirit import growth, increasing to $4.9 billion from $1.1 billion between 2014 and 2019 after inflation, according to the USDA.
National distilled spirit associations across North America warned that tariffs would negatively affect the entire industry, especially for protected products that can’t be made outside the country. A slowdown caused by the COVID-19 pandemic and inflation would only be made worse by a tariff war, they cautioned.
“Bourbon and Tennessee Whiskey can only be made in the U.S., Tequila in Mexico, and Canadian Whisky in Canada. The imposition of a tariff not only negatively impacts trading partners but also harms domestic industries,” the U.S. Distilled Spirits Council, the Mexican Chamber of the Tequila Industry and Spirits Canada said in a joint statement Saturday, urging collaboration.
Clothing and apparel
The U.S. is the largest importer of clothing in the world, with $79.3 billion of apparel imported in 2023, mostly from Asia. China tops the export chart, with a 21% market share in U.S. imports in 2023, although the value has dropped in recent years in favor of Vietnamese, Bangladeshi and Indian goods, among others.
Mexico was the seventh highest importer of apparel that year, according to a U.S. International Trade Commission report in September 2024. And good luck putting the shoe on the other foot. More than 95% of the U.S. footwear market is supplied by imports, with China accounting for a 42.2% market share in 2021 — worth $11.5 billion, according to the International Trade Commission.
The Associated Press was used in this report.
Inside the business of entertainment
The Wide Shot brings you news, analysis and insights on everything from streaming wars to production — and what it all means for the future.
You may occasionally receive promotional content from the Los Angeles Times.
