In Video: How Trump's proposed tariffs could affect prices and your wallet

In Video: How Trump's proposed tariffs could affect prices and your wallet

Tariffs and Inflation: A Familiar Pattern

The recent announcement of tariffs on goods imported from Canada and Mexico has sparked concerns about the impact on American consumers. We’ve seen this before in the first Trump Administration, when tariffs were implemented on various imported goods, leading to increased prices and inflation. A chart showing the correlation between tariffs and inflation is telling, with the blue line representing items subject to tariffs and the red line representing items without tariffs. The result? Inflation rose for those items with tariffs.

Higher Prices at the Grocery Store

The tariffs will likely lead to higher prices at the grocery store, making it difficult for consumers to make ends meet. Frozen french fries, for example, are a staple that is heavily imported from Canada. In fact, 80% of American frozen french fries come from Canada. This means that consumers may be forced to find alternative options or pay a premium for their favorite snacks. Similarly, avocados, beer, beef, fresh fruit, and fresh vegetables are all imports that could see price increases due to the tariffs.

Automotive Industry Consequences

The North American automotive industry is also set to be impacted by the tariffs. President Trump wrote the rules for how parts pass over the borders between the US, Canada, and Mexico, but now he wants to slap tariffs on the very deal he put in place. This could lead to legal challenges, but one estimate suggests that the price of a new car could rise by as much as $3,000.

A Familiar Pattern

This is not the first time we’ve seen tariffs lead to increased prices for American consumers. In the first Trump Administration, tariffs were implemented on imported washing machines, leading to a rise in prices for all washing machines. This is a familiar pattern, and there’s no reason to think that other countries won’t retaliate against the US by imposing their own tariffs.

The Goal: Jobs and Security

While the short-term impact of tariffs may be higher prices for Americans, the medium-term goal is to bring jobs back to the US and stop illegal immigration and the drug trade. However, it remains to be seen whether these goals will be achieved, and whether the cost to consumers will be too great to bear. As the situation unfolds, it’s clear that Americans will be paying the price for the tariffs, both literally and figuratively.