President Donald Trump issued tariffs and then delayed the execution as other countries responded. So what is a tariff? A tariff is a tax or duty a government imposes on imported or exported goods. Tariffs are primarily used to regulate trade by making foreign goods more expensive, thus encouraging the consumption of domestic goods. The effect of a tariff is that imported goods become pricier.
Trump has imposed tariffs on China, Canada, and Mexico. Canada is among America’s largest trading partners, featuring essential products such as energy, vehicles and automotive parts, machinery and equipment, minerals and metals, agricultural products including wood and paper, chemicals and plastics, aerospace technology, and consumer goods.
The United States imports a wide range of electronics and technology from China, including smartphones, laptops, LED screens, televisions, and various transportation items like auto parts, tires, bicycles, motorcycles, and electric vehicle batteries. It also brings in medical and pharmaceutical products, such as medical devices and equipment, along with some pharmaceutical ingredients.
America imports a diverse array of products from Mexico, making it one of its largest trading partners. Notable imports include cars, trucks, buses, engines, and tires. Electronics and machinery, such as televisions and monitors, along with household appliances like refrigerators and washing machines, are also significant. Most importantly, agricultural and food products encompass fresh vegetables (including avocados, peppers, and tomatoes), fresh fruits (such as berries, bananas, and mangoes), beef, pork, seafood, furniture (like wooden pieces and mattresses), lighting, and home décor. The clothing sector features leather goods, apparel, and footwear.
In 2023, the United States imported $69 billion worth of cars and light trucks from Mexico – more than any other country — and $37 billion from Canada. Another $78 billion in auto parts came from Mexico and $20 billion from Canada. The engines in Ford F-series pickups and the iconic Mustang sports coupe, for instance, come from Canada.
Energy imported from Canada, including oil, natural gas and electricity, would be taxed at a lower 10% rate.
Canada is by far America’s biggest foreign supplier of crude oil. From January through November last year, Canada shipped the U.S. $90 billion worth of crude, well ahead of No. 2 Mexico at $11 billion.
From my conversations with many people, the tariff effect is not widely understood. The impact on the average American family of four is about $3,342, or roughly $834 for the average American.
Trump bullies with presidential power, and the American people will pay the price as the cost of goods will rise. If you plan to buy big-ticket items like TVs, computer equipment, or furniture, now is the time to do it. By June, you’ll feel the impact of Trump’s tariffs.
