What items will get costlier in US trade war? – World

US President Donald Trump’s trade war with neighbours Canada and Mexico has prompted vows of reciprocal tariffs.

The three countries, which have deeply integrated economies and supply chains, see an estimated $2bn worth of manufactured goods crossing the borders daily, according to a BBC News report.

So which products could get more expensive in the days to come?

Cars

Cars are likely to go up in price — by about $3,000. That’s because parts cross the US, Canadian and Mexican borders multiple times before a vehicle is assembled.

As a result of higher taxes paid on the importing of parts to build the cars, it is likely the costs will be passed on to customers.

Alcohol

Popular Mexican beers could get more expensive for US customers if the American companies importing them pass on the increased import taxes. However, it’s also possible that rather than passing on the cost increase, firms could just import less.

When it comes to spirits, certain brands, such as Bourbon, Tennessee whiskey, tequila and Canadian whisky are “recognised as distinctive products and can only be produced in their designated countries”.

So given the production of these drinks cannot simply be moved, supplies might be impacted, leading to price rises. The trade bodies also highlighted that many companies own different spirit brands in all three countries.

Homes

Imports of Canadian lumber are set to be hit by import tariffs to the US. Trump has said the US has “more lumber than we ever use”.

However, the National Association of Home Builders has urged the president to exempt building materials from the proposed tariffs “because of their harmful effect on housing affordability”.

The industry body has “serious concerns” that the tariffs on lumber could increase the cost of building homes — which are mostly made out of wood in the US — and also put off developers building new homes.

“Consumers end up paying for the tariffs in the form of higher home prices,” the NAHB said..

Maple syrup

When it comes to the trade war with Canada, the “most obvious” household impact is on the price of Canadian maple syrup, according to Thomas Sampson, associate professor of economics at the London School of Economics.

Canada’s billion-dollar maple syrup industry accounts for 75pc of the world’s entire maple syrup production.

The majority of the sweet staple — around 90pc — is produced in the province of Quebec, where the world’s sole strategic reserve of maple syrup was set up 24 years ago.

Fuel prices

Canada is America’s largest foreign supplier of crude oil. According to the most recent official trade figures, 61pc of oil imported into the US between January and November last year came from Canada.

While 25pc has been slapped on Canadian goods imported to the US, its energy faces a lower 10pc tariff.

The US doesn’t have a shortage of oil, but the type its refineries are designed to process means it depends on so-called “heavier” — i.e. thicker — crude oil from mostly Canada and some from Mexico.

Avocados

One food import that American consumers may see a significant price increase in is avocados. Grown primarily in Mexico due to its warm, humid climate, Mexican avocados make up nearly 90pc of the US avocado market each year.

However, with the introduction of new tariffs, the US Agriculture Department has warned that the cost of avocados — along with popular avocado-based dishes like guacamole — could surge, especially by Super Bowl Sunday on Feb 9.

Published in Dawn, February 4th, 2025