Donald Trump is about to subject you to one of the most bizarre economic experiments in modern history. As promised during his campaign, he threatened 25% tariffs on imports from Canada and Mexico, with a 10% tariff on imports from China. There’s a slight exception for oil, natural gas, and electricity from Canada, which will be taxed at a lower rate of 10%. Mexico’s tariff is now delayed a month, though they still have the Sword of Damocles dangling over their head.
The Trump administration clearly believes these tariffs will provide an economic incentive for companies to focus on domestic production, supplied as much as possible by domestic raw materials. In theory, this means more jobs, economic growth, and national self-sufficiency, adding up to an America that is “great again.” That said, the stated reason is that this is a response to fentanyl smuggling — though, to be honest, that feels like PR.
One big problem is that even in the best-case scenario, this isn’t going to happen overnight — and certainly won’t stop the flow of narcotics into the United States. The infrastructure simply isn’t in place and putting new production and supply lines takes time. What that means is that life in the United States is about to get more expensive – potentially much much more expensive. As for which prices are set to rise? The simple answer is “literally everything,” but let’s zero in on a few things that’ll get hit the hardest.
Automobiles
American auto stocks plummeted after the White House confirmed it’ll impose 25% tariffs on Mexico & Canada tomorrow (and 10% on China).
— Steven Rattner (@SteveRattner) January 31, 2025
The trade barriers spell disaster for US automakers, whose supply chains are deeply entwined with our North American neighbors. pic.twitter.com/1HpOS1HQTx
Many major automobile companies will be utterly terrified of what these tariffs will do to their businesses. Individual components for cars are often assembled on one side of the border and shipped to assembly plants on the other. This would mean by the time a single automobile is complete, its parts would have crossed the border multiple times, each time incurring a 25% tariff.
Food
America: these are tariffs that you as consumers will be paying. Every product you don't make domestically that you import from Canada or Mexico will become more expensive.
— The Serfs (youtube.com/theserftimes) (@theserfstv) February 2, 2025
Rich pundits laughing that it's epic don't have to worry about the cost of groceries going up 50% pic.twitter.com/5DEyGxaf0n
In 2023, the United States imported $45 billion in fresh fruit and vegetables from Mexico and $40 billion from Canada, including tomatoes, peppers, cucumbers, pineapples, and raspberries. As these products spoil quickly, they will be hit instantly by the tariffs, making a trip to the grocery store an increasingly expensive proposition. This figure will rise when it comes to fruits and vegetables that can’t be easily grown within the United States, like avocados and bananas.
Video games
If you are planning on buying a gaming console PlayStation 5, Xbox, Nintendo Switch etc buy them NOW.
— politics is ghetto 📝 (@DialogueDilema) January 27, 2025
Once Trump slaps tariffs on semiconductor chips, prices for gaming consoles will skyrocket.
Trump is increasing prices for the gaming community too. #NintendoSwitch… https://t.co/okOfaAZhBT
Almost every single video game console, whether from the Japanese Sony and Nintendo or the American Microsoft, is produced overseas. This means that we should soon expect, for example, a PlayStation 5 to be (at minimum) 10% more expensive than it is right now. Rinse and repeat with other hardware like Steam Decks, Xboxes and so on. One small consolation is that Nintendo now has manufacturing plants in Vietnam, meaning the Switch 2 might not be affected.
Computers and laptops
Grok- What will Trump's tariffs do to prices?
— Sko Hayes (@skohayes) February 2, 2025
Most economists predict that these tariffs will raise the cost of goods for U.S. consumers.
Tariffs could contribute to inflation.
Electronics like smartphones, laptops, and video game consoles could see significant price hikes. pic.twitter.com/Slg2S0jJPH
The above also applies to PCs and laptops, whose components are also produced in China. Already expensive graphics cards for PCs will rise in price, though as these are in high demand globally the situation may be compounded by companies like Nvidia choosing to avoid the tariffs by shipping more product to non-U.S. markets, creating domestic scarcity and — yup — driving the price up.
This is just a small sampling of products that will get more expensive. However, tariffs on imported oil will mean prices on everything will go up as it’ll cost more to transport goods to stores or to your home. It remains to be seen what Americans will make of all this. The White House appears willing to weather the storm, though we expect the Donald Trump honeymoon — such as it is — will come to a rapid end the first time people gawk at the price of their groceries.
Published: Feb 3, 2025 01:16 pm