Michael Race
Business Reporter, BBC News
Getty images
US President Donald Trump launched a trade war by imposing tariffs from the neighbors of his country Canada and Mexico.
Canada has responded in kind and Mexico also said it would retaliate. The three countries have deeply integrated savings and supply chains, with around $ 2 billion (1.6 billion pounds sterling) of manufactured products crossing borders daily.
Trump says that he wants to protect American industry, but many economists warn that taxes could increase prices for consumers in the United States.
Indeed, prices are paid by the national company importantly the goods, which can choose to transmit the cost directly to customers, or to reduce their imports, which would mean fewer available products.
So what is likely to become more expensive?
Cars
Cars should increase in price – by $ 3,000 according to TD Economics.
This is because the parts cross the American, Canadian and Mexican borders several times before a vehicle.
Due to the increase in taxes paid on the importation of parts to build cars, it is likely that the costs will be passed on to customers.
“It is enough to say that the disturbance of these trends through prices … would come with significant costs,” said Andrew Foran, economist at TD Economics.
He added that “uninterrupted free trade” in the car sector had “existed for decades”, which led to a drop in prices for consumers.
Beer, Tennessee and Tequila whiskey
Getty images
Mexican beers popular Modelo and Corona could become more expensive for American customers if American companies that import them transmit increased import taxes.
However, it is also possible that rather than transmitting the increase in costs, companies could simply import less.
Modelo has become the number one beer brand in the United States in 2023, and remains at the forefront, for the moment.
It is more complex with regard to spirits. The sector has been widely exempt from prices since the 1990s. Organizations in the United States, Canada and Mexico industry published a joint statement before the announcement of the prices saying that they were “deeply concerned”.
They say that some brands, such as bourbon, whiskey from Tennessee, Tequila and Canadian whiskey are “recognized as distinctive products and can only be produced in their designated countries”.
Thus, since the production of these drinks cannot simply be moved, supplies can be affected, which causes price increases. Commercial organizations have also stressed that many companies have different spiritual marks in the three countries.
Houses
Canadian wood imports should be struck by import prices in the United States. Trump said the United States had “more wood than we use.”
However, the National Association of Maisons Manufacturers urged the president to exempt the building materials from the proposed prices “because of their harmful effect on the affordability of housing”.
The organization of the industry has “serious concerns” according to which wood prices could increase the cost of building houses – which are mainly developed in wood – and discourage the construction of new houses.
“Consumers end up paying the prices in the highest price form of houses,” said the NAHB.
Maple syrup
Getty images
Regarding the trade war with Canada, the most obvious “impact of households” concerns the price of Canadian maple syrup, according to Thomas Sampson, associate professor of economics at the London School of Economics.
The dollars’ billion dollar syrup industry in Canada represents 75% of the world’s entire maple syrup production.
The majority of sweet diet – around 90% – is produced in the province of Quebec, where the only strategic reserve of maple syrup in the world was created 24 years ago.
“This maple syrup will become more expensive. And it is a direct increase in prices that households will face,” said Sampson.
“If I buy goods produced at the national level in the United States, but which are produced using Canada inputs, the price of these goods will also increase,” he added.
Fuel price
Canada is the largest Foreign Supplier of Broken Oil in America. According to the latest official trade figures, 61% of petroleum imported into the United States between January and November of last year came from Canada.
While 25% was slapped on Canadian products imported into the United States, its energy faces a price of 10%.
Now, the United States does not have a shortage of oil, but the type that its refineries are designed to treat means that it depends on the so-called “heavier” oil-that is to say of Most of Canada and others from Mexico.
“Many refineries need heavier crude oil to maximize the flexibility of gasoline, diesel and jet fuel production,” according to American fuel and petrochemical manufacturers.
This means that if Canada had decided in its reprisals at American prices to reduce crude oil exports, this could increase prices for petrol pumps.
Lawyers
Getty images
A food import in which American consumers can see a significant increase in prices is lawyers. Cultivated mainly in Mexico due to its warm and humid climate, lawyers represent almost 90% of the American lawyer market each year.
However, with the introduction of new prices, the American Department of Agriculture warned that the cost of lawyers – as well as popular dishes based on lawyers such as Guacamole – could increase, especially on Sunday of the Super Bowl February 9.
Additional reports by Lucy Acheson
