Trump's Planned Canada Tariffs May Cost U.S. Households $690 Each
Despite the delay in tariffs against Mexico, President Trump's proposed 25% tariff on Canadian imports could significantly impact American households and businesses.
Economic Impact
According to Yale Budget Lab, the tariff could cost U.S. households approximately $690 each, assuming Canada retaliates with its own tariffs. The tariff could also shrink the economy by $875 billion, representing a 0.2% reduction in GDP.
Impact on Industries
The tariff would raise prices for various products heavily relied upon by American families and businesses, including:
* Natural gas
* Fertilizer
* Lumber
* Milk
* Greenhouse produce
The proposed 10% tariff on Canadian oil could also lead to higher gas prices. Tariffs on vehicles and parts could disrupt the automotive industry's supply chains and potentially increase car prices by an estimated $3,000.
Political Implications
While the direct cost of the tariff on Canada may seem relatively small (0.42% increase in consumer prices overall), Yale Budget Lab's Ernie Tedeschi warns that it could raise prices for goods that Americans are particularly sensitive to, such as energy and vehicles. This could create political challenges for Trump, as "voters vote with their pocketbooks and based on price tags."