What could get more expensive if Trump launches a new trade war with Mexico and Canada | CNN
News Summary:
On September 5, oil pumpjacks and tanks in Kindersley, Saskatchewan, stood as a stark reminder of North America’s interdependence on resources. As former President Trump proposes a 25% tariff on imports from Canada and Mexico, analysts warn of significant repercussions for American consumers. From soaring gas prices to costlier avocados, cars, and tequila, the ripple effects could disrupt multiple industries.
Petroleum expert Patrick De Haan noted on X, “A 25% tariff would spike gas prices by up to 75 cents per gallon,” particularly impacting the Great Lakes, Midwest, and Rockies regions. Although Trump also suggests ramping up U.S. oil production, experts argue this is a long-term solution requiring years of investment.
The tariff’s scope isn’t limited to oil. With climate shifts reshaping U.S. agriculture, reliance on Mexican imports like avocados has surged. In 2022 alone, 90% of avocados consumed in the U.S. were imported, with Mexico accounting for 89% of those imports. A 25% tariff could send prices of avocado toast and guacamole skyrocketing.
Meanwhile, the automotive industry is equally vulnerable. In 2023, the U.S. imported $44.76 billion worth of vehicles from Mexico, making it the top import. Mexican factories, hosting automakers like General Motors and Ford, supply parts essential to assembling American cars. Shares of U.S. carmakers already felt the tremors on Tuesday, with General Motors stocks dropping 9%. Tariffs on these imports could disrupt supply chains and drive up vehicle prices.
Alcohol imports also face turbulence. Mexico supplies over 80% of beer imports, along with tequila and mezcal. In FY 2024, the U.S. imported $4.6 billion worth of tequila from Mexico and substantial Canadian spirits. Distilled Spirits Council CEO Chris Swonger emphasized that such tariffs could devastate U.S. hospitality, which is still recovering post-pandemic.
The Bigger Picture:
For the first time in two decades, Mexico surpassed China as the largest exporter to the U.S. in 2023, with Canada following close behind. This growing reliance on North American imports means Trump’s proposed tariffs could have unavoidable effects, pushing businesses to pass rising costs to consumers.
Bottom Line:
From farm to table and car to bar, the proposed tariffs promise to shake up everyday life for Americans.
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