How Donald Trump’s tariffs could impact consumers
Donald Trump has long threatened increasing tariffs on goods from Mexico, Canada, and China.
The second-time president argues higher levies will help reduce illegal migration and the smuggling of fentanyl to the US.
On Saturday 1 February the three tariffs came into effect, with Mexican and Canadian goods subject to the full 25% – and Chinese imports to 10%.
Although the Trump administration says the changes will boost domestic production, there will likely be wide-ranging negative consequences for the US consumer.
Economists argue supply chains will be disrupted and businesses will suffer increased costs – leading to an overall rise in prices.
Analysis:
Why has Trump targeted Mexico and Canada?
Both Mexico and Canada rely heavily on their imports and exports, which make up around 70% of their Gross Domestic Products (GDPs), putting them at even greater risk from the new tariffs.
China only relies on trade for 37% of its economy, having made a concerted effort to ramp up domestic production, making it relatively less vulnerable.
Here we look at where US consumers will feel the biggest impact.
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Tariffs to focus on Mexico and Canada
Avocados – and other fruit and veg
The US imports between half and 60% of its fresh produce from Mexico – and 80% of its avocados, according to figures from the US Department of Agriculture.
Canada also supplies a lot of the US’s fruit and vegetables, which are mainly grown in greenhouses on the other side of the US border.
This means that increased tariffs will quickly be passed on to consumers in the form of higher prices.
The US still grows a considerable amount of its own produce, however, so the changes could boost domestic production.
But economists warn that overreliance on domestic goods will see those suppliers increase their prices too.
Petrol and oil prices
Oil and gas prices are likely to be impacted – as Canada provides around 60% of US crude oil imports and Mexico roughly 10%.
According to the US Energy Information Administration, the US received around 4.6 million barrels of oil a day from Canada last year – and 563,000 from Mexico.
Most US oil refineries are designed specifically to process Canadian products, which would make changing supply sources complex and costly.
There has been some speculation that Mr Trump may exempt oil from the new changes – but if he doesn’t, the US could see an increase in fuel prices of up to 50 cents (40p) a gallon, economists have predicted.
Cars and vehicle parts
The US car industry is a delicate mix of foreign and domestic manufacturers.
The supply chain is so complex, car parts and half-finished vehicles can sometimes cross the US-Mexico border several times before they are ready for the showroom.
If this continues, the parts would be taxed every time they move countries, which would lead to an even bigger increase in prices.
To mitigate this, General Motors has said it will try to rush through Mexican and Canadian exports – while brainstorming on how to relocate manufacturing to the US.
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Trump 100: Why is he blaming diversity push for the Washington DC plane crash?
Electronic goods
When Donald Trump imposed a 50% tariff on imported washing machines during his first term in 2018, prices suffered for years afterwards.
China produces a lot of the world’s consumer electronics – and smartphones and computers specifically – so the 10% tariff could have a similar effect on those devices.
The Biden administration tried to legislate to promote domestic production of semiconductors (microchips needed for all smart devices) – but for now, the US is still heavily reliant on China for its personal electronics.
This will mean an increase in prices for consumers unless tech companies can relocate their operations away from Beijing.
Boost for the steel industry
The sector that could feel the most benefit from the Trump tariffs is the steel and aluminium industry.
It has long been lobbying the government to put tariffs on foreign suppliers – claiming they are dominating the market and leaving US factories without enough business and at risk of closure.
Steel imports increasing in price would promote domestic production – and possibly save some of the plants.
But when Mr Trump increased steel tariffs during his first term, prices also increased – which business leaders said forced them to pass on costs and left them struggling to complete construction projects on budget.
Overall inflation
An increase in the prices of all these goods would inevitably lead to widespread overall inflation.
According to analysis by Capital Economics, the Canadian and Mexican tariffs would put inflation above 3% – which is much higher than the Federal Reserve’s target of 2% – and the Chinese levies would see it rise even further.
The driver of a car was also killed when a medical transport plane crashed in Philadelphia, the mayor of the US city has confirmed.
All six on board were killed in the crash – a young patient and her mother, on their way home to Tijuana, Mexico, along with four crew members.
At least 19 others were also injured in the crash, which left several homes engulfed in flames.
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Small plane crashes in Philadelphia
The child on board had just completed treatment for a life-threatening condition. The plane crashed around 30 seconds after taking off.
In a news conference on Saturday, Philadelphia mayor Cherelle Parker confirmed another person had died, who was on the ground in a car when the plane crashed.
She added the number of injured may rise.
Smoke rises above houses after the plane crash in Philadelphia. Pic: AP
Adam Thiel, managing director for the city of Philadelphia, said there were “a lot of unknowns” as to who was where on the streets when the plane came down.
It would likely be days until the total number of dead and injured was known, he said, adding teams were now going house to house to inspect dwellings as part of efforts to get a sense of how far debris was scattered.
Debris of the aircraft on the ground at the site of a crash in Philadelphia.
Pic: Reuters/Rachel Wisniewski
The plane came down near the Roosevelt Mall in the Rhawnhurst area of Pennsylvania at 6.30pm local time on Friday (11.30pm UK time).
Jet Rescue Air Ambulance, which operated the Learjet 55, previously said in a statement: “We cannot confirm any survivors.”
Read more from Sky News:
What we know about Washington crash passengers
Second body found in search for missing sisters
Trump hits Canada, Mexico and China with tariffs
The plane crash in Philadelphia.
Pic: @as1lmhsa
On Saturday, in a statement on social media, Mexican President Claudia Sheinbaum said the six people who died on board the plane were all Mexican nationals.
The child had received care at Shriners Children’s hospital and was heading to Missouri before flying onward to Mexico.
The crash came just two days after the deadliest US air disaster in a generation.
An American Airlines passenger jet and a military helicopter collided mid-air in Washington DC, killing 67 people.
US
Black Hawk helicopter was on emergency evacuation trial run before Washington DC crash, officials say
The Black Hawk helicopter which collided with a passenger plane above Washington DC was training for a hypothetical evacuation of US leaders at the time, according to US officials.
Three soldiers inside the military aircraft were killed as well as 64 people aboard the American Airlines jet.
The scenario involved practising the evacuation of high-ranking US officials, Reuters reported.
An investigation into the cause of the catastrophe is ongoing.
A Coast Guard vessel with a crane works near the helicopter wreckage in the Potomac River. Pic: AP
It has emerged that the helicopter had been on a training flight along a route core to a seldom-discussed military mission – to evacuate senior officials to safety in the event of an attack on the US, officials say.
The mission is known as “continuity of government” and “continuity of operations” and is meant to preserve the ability of the government to operate in a disaster scenario.
The rough last known location of American Airlines Flight 5342 before the crash
New US defence secretary Pete Hegseth revealed the Black Hawk crew’s training mission on Thursday, saying they “were on a routine, annual re-training of night flights on a standard corridor for a continuity of government mission”.
The army has come under scrutiny for flying at night near a busy airport, but officials pointed to the sensitive nature of the operation.
Read more:
What we know about the passengers
What air traffic audio tells us
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Tracking the Washington DC plane crash
“Some of their mission is to support the department of defence if something really bad happens in this area, and we need to move our senior leaders,” said Jonathan Koziol, the chief of staff of the army’s aviation directorate.
The most recent time the mission is known to have been carried out – for real – was on September 11, 2001, when a Black Hawk was sent to collect then deputy secretary of defence Paul Wolfowitz following the terror attacks on New York and Washington.
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