Throughout his presidential campaign, President Donald Trump threatened to implement tariffs against such trade partners as China, Canada and Mexico. Following his election, Trump continued to promise tariffs, stating in a White House fact sheet that China, Canada and Mexico need to be accountable in stemming the tide of fentanyl and illegal immigration from crossing their borders into America.
Trump slapped tariffs upon China almost immediately; he then gave Canada and Mexico one month for negotiations. That pause ended when Trump announced that a 25% tariff would be placed on all goods coming from Canada and Mexico beginning at 12:01 a.m. on Tues., March 4. China will also receive an additional 10% duty on its already preexisting tariffs.
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Here are more details on these new tariffs and what they could mean for your wallet.
Trump said that there was “no room left” for the countries to make a deal.
“They’re going to have to have a tariff,” he announced from the White House. “So what they have to do is build their car plants, frankly, and other things in the United States, in which case they have no tariffs.”
The Trump administration confirmed his announcement, which caused the Dow to tumble by 600 points and the S&P 500 to see its worst day since December 2024, per CNBC. The value of the Mexican peso and Canadian dollar also fell, CNBC reported.
As Reuters reported, CEOs and economists say these tariffs will cover over $900 billion worth of annual imports. As a result, the entire North American economy could see setbacks.
Why was this announcement so calamitous? While tariffs are designed to benefit domestic sectors and U.S. workers, per the Economic Policy Institute, many companies faced with tariffs pass costs on to consumers in the form of price increases. This can end up slowing sales and unsettling the economy.
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How soon could this impact your wallet?
As NBC News reported, the top five goods imported to the U.S. are machinery products, electronics, automotive products, energy products and pharmaceutical products — and a large portion of those imports are from China, Mexico and Canada. This, it explained, will likely cause price increases on an array of items.
According to public policy professor Gustavo Flores-Macias at Cornell University, price increases will be felt especially in the automotive sector, ABC News reported. Auto industry supply chains that run between America, Canada and Mexico will likely be disrupted, and auto manufacturing materials could get more expensive — as could whole vehicles being imported to the U.S. All of this points to cars likely getting more expensive.
Further, a number of farming and coffee imports will also likely increase in price, making a trip to the grocery store even more expensive than it was already.
While price increases on many items are likely, according to NBC, Trump has also mentioned the possibility of reducing or eliminating personal income taxes with the revenue from tariffs, which could eventually ease the burden for consumers.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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This article originally appeared on GOBankingRates.com: Trump’s Tariffs on Mexico and Canada Are Now in Effect — Here’s What They Could Mean for Your Wallet
