Seven Items that could cost more under new Tariffs


A woman looks at computers at a retail store.

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The Key Takeaways

  • Yale economists said tariffs on goods from Mexico, Canada, and China could result in an average $1,250 reduction in each household's annual purchasing power.
  • The economists stated that domestic producers usually raise their prices when tax rates are increased on imported items.
  • Analysts expect the most impact on computers, fruit and vegetables, and toys.

Tariffs on some of the U.S.'s biggest trading partners could increase costs at grocery stores, car dealerships, and other locations as businesses pass on the increased costs.

Donald Trump, President of the United States announced on the weekend an increase in tariffs on Canada’s goods and on Chinese products by 10% starting midnight. One month has passed since the 25% tariff on imported goods from Mexico was delayed.

According to economists, companies generally increase prices in order to offset the increased cost of imports. This includes everything from auto parts to avocados. Yale University’s economists say that when tariffs are implemented, domestic producers will also raise their prices. Tariffs are estimated to cost the average household $1,250 annually more.

These are the industries that are likely to see price rises.

Toys

JPMorgan’s research highlighted on Monday revealed that more than 80 percent of the toys imported into the U.S. are from China. The stores stock very few products made in America, with Walmart (WMT), Target TGT (and Amazon AMZN (among others) having a significant share of this category.

Automobiles and auto parts

JPMorgan reported that about 65% of the auto parts are sourced from tariffed countries, with Mexico being one of them. Yale economists predict that vehicle and part prices will rise by 3.9%. JPMorgan initially expected auto dealers and parts suppliers to accept smaller profit margins. This means they might not pass on all the increased costs to consumers.

Electronics

JPMorgan reported that only a small portion of the consumer electronics is sourced domestically. Prices are expected to increase the most—5.7% on average—for computers and electronics, according to Yale economists.

Home Improvement Supplies and Houseware

JPMorgan stated that over half of the materials and furniture used for home improvement were imported. Leather products will cost an average of 4.5% more, and textiles 3% more, based on Yale economists' calculations.

Groceries

JPMorgan reported that 45% of the groceries are imported from China, Canada, and Mexico. According to federal data, Mexico will be the largest source of fruits and vegetables by 2023. Fresh produce prices are forecasted to rise 1.8% on average, by Yale economists' estimates.

Energie

Energy News Network reports that Trump has announced a 10% tariff reduction on Canadian energy. However, the increase in gas and electric prices is expected, especially in northern states. Yale economists have said that Americans will pay an average of $0.04 extra per gallon after a spike in gas prices. The initial increase could be much higher.

Alcohol

The U.S. imported nearly $5.7 billion in malt beer and $4.7 billion in liquors and liqueurs from Mexico in 2023—far more than was spent with other international suppliers in 2023, according to the most recent data available from the U.S. Department of Agriculture.

Constellation Brands’ (STZ) shares, which import Modelo and Corona beer from Mexico after tariffs are announced, have fallen.

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leadzevs/ author of the article

LeadZevs (John Lesley) is an experienced trader specializing in technical analysis and forecasting of the cryptocurrency market. He has over 10 years of experience with a wide range of markets and assets - currencies, indices and commodities.John is the author of popular topics on major forums with millions of views and works as both an analyst and a professional trader for both clients and himself.

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