New Tariffs Take Effect: What That Could Mean For PA Consumers

New 25 percent tariffs on products imported from Mexico and Canada that took effect Tuesday could increase the cost Pennsylvanians pay for everything from fruits and vegetables to gasoline and lumber, experts predict.

The tariffs, announced Monday by President Donald Trump, sparked renewed concerns of a North American trade war that already has shown signs of pushing up inflation and hindering economic growth. Trump also doubled the 10 percent tariff on exports from China to 20 percent.

Canada has said it will impose tariffs on a wide range of U.S. products and Mexico has said it will do the same.

The import taxes are “a very powerful weapon that politicians haven’t used because they were either dishonest, stupid or paid off in some other form," Trump said Monday at the White House. "And now we’re using them.”

An analysis by the Peterson Institute for International Economics suggests that the tariffs could cost the typical Pennsylvania family more than $1,200 a year.

Another analysis by the Yale University Budget Lab estimates a consumer loss of $1,600-$2,000 per household on average in 2024 dollars.

The Trump administration has suggested inflation will not be as bad as economists claim, saying tariffs can motivate foreign companies to open factories in the United States.

In response, Canadian Prime Minister Justin Trudeau on Tuesday said: “There is absolutely no justification or need whatsoever for these tariffs today. Even though you’re a very smart guy, this is a very dumb thing to do," according to an NBC report.

Democrats on the Ways and Means Trade Subcommittee, of which Pennsylvania's Brendan Boyle is a member, said the consequences of the tariffs will be "devastating."

In a statement released Tuesday, the Democratic lawmakers said "costs will increase on everything from gas to groceries, making it even harder for American families to make ends meet." The statement continues: "President Trump is jeopardizing hundreds of thousands of American jobs. President Trump is starting a trade war and American families are caught in the cross-fire."

Separately on his Truth Social platform Monday, Trump told farmers: “To the Great Farmers of the United States: Get ready to start making a lot of agricultural product to be sold INSIDE of the United States,” he wrote. “Tariffs will go on external products on April 2nd. Have fun!”

Here are more things to know:

What Could Cost More

Canada, China and Mexico account for a significant share of imports of machinery-related products, electronics and automotive products, which could drive up the cost of products such as new cars, smartphones and bicycles.

Almost three-fours of the agricultural imports into the United States came from Mexico in 2023, according to the USDA. The tariffs on tomatoes, avocados and distilled spirits could increase prices of those items. About 70 percent of the global supply of maple syrup comes from Canada, and about 60 percent of its exports went to the United States in 2023.

Automakers ship tens of billions of dollars worth of automobiles, engines, transmissions and other components across the borders of both Mexico and Canada every week, and import billions more in parts from China. General Motors produces nearly 40 percent of all vehicles made in North America in Canada and Mexico.

Although the tariffs on Canada include a 10 percent exception for energy, gas prices could go up, too. The U.S. imports about 60 percent of its oil from Canada at a cost of about $124.9 billion annually.

Tariffs on lumber and building supplies from Canada could increase the cost of building a house, worsening the housing affordability crisis. About 70 percent of the softwood lumber and gypsum, which is used for drywall, are imported from Canada and Mexico, according to the National Association of Home Builders.

According to the Bureau of Industry and Security and Trading Economics, here are some products that could be affected by the tariffs:

• Wood
• Charcoal
• Aluminum
• Iron and steel appliances
• Cereal, flour, starch and milk products
• Rubber products
• Alcoholic beverages
• Carpets and other textile floor coverings
• Wool, animal hair, horsehair yarn and fabric
• Umbrellas, walking-sticks, seat-sticks, whips
• Cotton
• Photographic or cinematographic goods
• Cork products
• Printed books

More Economic Disruption Expected

The broad-based tariffs create more economic uncertainty about relationships with the nation’s top trading partners. Mexico, China and Canada — at $505.9 billion, $438.9 billion and $412.7 billion, respectively — accounted for 42 percent of total U.S. imports in 2024, according to an analysis by NBC News using U.S. Census Bureau statistics.

Imported goods are also a key driver of economic growth. Companies ranging from Ford to Walmart have warned about the negative impact that tariffs could create for their businesses.

“It’s going to have a very disruptive effect on businesses, in terms of their supply chains as well as their ability to conduct their business operations effectively,” Eswar Prasad, an economist at Cornell University, told The AP. “There are going to be inflationary impacts that are going to be disruptive impacts.”

Impact On Farmers, Rural Economies

U.S. farmers export around $175 billion worth of agricultural products annually, with these markets comprising about 20 percent of their annual income, according to the American Farm Bureau Federation.

Last year, farmers exported more than $30 billion in agricultural products to Mexico, $29 billion to Canada and $26 billion to China.

It’s unclear what agricultural products would specifically be affected by the tariffs or if there would be any exceptions. The Farm Bureau said the tariffs against the top three agriculture export markets come as farmers and rural communities already are experiencing economic headwinds.

While the organization supports the goals of security and fair trade with Mexico and Canada, “we know from experience that farmers and rural communities will bear the brunt of retaliation,” Farm Bureau President Zippy Duvall said in a statement last month. “Harmful effects of retaliation to farmers ripple through the rest of the rural economy.”

About 80 percent of the supply of potash, a key fertilizer ingredient used by U.S. farmers, comes from Canada. Tariffs that increase fertilizer prices threaten to deliver another blow to the finances of farm families already struggling with inflation and high supply costs, Duvall said.

The Associated Press contributed reporting.