What possible tariffs on Mexico and Canada could mean for you

ByHeather Grubola WPVI logo
Monday, February 3, 2025
How possible tariffs on Mexico and Canada could impact you
How possible tariffs on Mexico and Canada could impact you

President Donald Trump on Monday held off on his tariff threats against Mexico and Canada for 30 days after the two United States neighbors agreed to boost border security efforts.

Trump was expected to sign executive orders on Tuesday putting in place 25% tariffs on goods from Mexico and Canada and 10% tariffs on those from China, according to the White House.

READ MORE: Trump agrees to pause tariffs on Mexico, Canada for a month

The two nations threatened retaliation of their own, raising the prospects of a broader regional trade war.

In a statement on X, Canadian Prime Minister Justin Trudeau said that on a call with Trump, he pledged additional cooperation on border security. It follows similar moves by Mexico earlier Monday.

Canadian Prime Minister Justin Trudeau said in a post on social media, writing, "Canada is implementing our $1.3 billion border plan -- reinforcing the border with new choppers, technology and personnel, enhanced coordination with our American partners, and increased resources to stop the flow of fentanyl.

Trudeau also added, "Nearly 10,000 frontline personnel are and will be working on protecting the border." The moves will result in a 30-day delay in the tariffs in order to work out a deal, he said.

SEE ALSO: Trump says Americans could feel 'some pain' from his new tariffs that are triggering a trade war

Trudeau said he'd also promised to appoint a "fentanyl czar" to help combat the drug from crossing the northern border. Very little fentanyl is trafficked across the northern border in comparison to the southern border -- about 43 pounds were seized at the northern border in 2024, according to U.S. Customs and Border Protection, as opposed to 21,100 pounds at the southern border.

The proposed tariffs would have a huge impact on consumers.

"Our goal is always to find the right product, the right size, the right price so I can get it to the consumer the right way," said Vinnie Iovine of Iovine Brothers Produce.

Iovine has been serving customers in Reading Terminal Market for 35 years along with his brother.

"There's a lot of hydroponic lettuces that come out of Canada. Tomatoes as well from Canada. Mexico has tomatoes," he said.

Iovine's biggest concern is avocados.

"So right now, avocados are probably $1.99. I think I have them in the store but I could see them going up, you know, $2.50, or something like that," Iovine said.

It is just one likely consequence of the tariff proposal.

"Tariffs are a tax placed on goods that we import into the United States," explained Mark Hamrick, senior economic analyst at Bankrate.

U.S. businesses directly pay the tariffs to the federal government on the goods they import. They then raise consumer prices to cover some or all of the cost.

"It's estimated that the average cost per person per year from tariffs -- if they are kept in place as threatened -- could be somewhere between $800 to $1,000 a person," said Hamrick.

Experts warn prices will jump from the grocery store to the gas pump and from computers to cars.

"About half of auto parts come from either Canada or Mexico. We could see a cost per automobile rise of about $3,000," said Hamrick.

And even if one or more tariffs are temporarily paused, economic experts say consumer sentiment has already been damaged.

"Two things undermine confidence on the part of business and consumers. One is volatility in policy. The second is uncertainty, and we very much have those latter two components present," Hamrick explained.

Another concern is what appears to be an escalating trade war with countries like Canada threatening to impose retaliatory tariffs on the United States.

That would hurt American businesses, which export their goods to Canada, and could have a real impact on employment in the U.S.

Kevin Hassett, director of the White House National Economic Council, said Monday that it was misleading to characterize the showdown as a trade war despite the planned retaliations and risk of escalation.

"Read the executive order where President Trump was absolutely, 100% clear that this is not a trade war," Hassett said. "This is a drug war."

But even if the orders are focused on illegal drugs, Trump's own remarks have often been more about his perceived sense that foreign countries are ripping off the United States by running trade surpluses.

On Sunday, Trump said that tariffs would be coming soon on countries in the European Union. He has discussed tariffs as both a diplomatic tool on national security issues, a way to raise revenues and a vehicle for renegotiating existing trade pacts.

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