Here’s what to know about Trump’s customs rates

On By Littum

President Trump signed executive orders on Saturday that introduced sweeping tariffs on the country’s three largest trading partners, a step that risks freeing a harmful trade war.

Trade war was also a feature of Mr. Trump’s first period in the White House. But his latest tariffs in Canada, Mexico and China, set to take effect at 1 p.m. 12:01 Eastern Time on Tuesday, may extend the extent of disturbance. The three countries account for more than a third of the products brought to the United States, supporting tens of thousands of millions of US jobs.

Here’s what to know about the expected fallout from customs:

All items imported from Canada and Mexico will be subject to a 25 percent duty, except Canadian energy products that will have a 10 percent duty, according to the executing orders. The orders also placed a 10 percent duty on Chinese goods.

The car and electrical equipment sector in Mexico is most exposed to disturbance from sweeping tariffs, just as mineral processing in Canada, according to Economists at S&P Global. In the United States, they are the biggest risks of agriculture, fishing, metal and automatic production.

Some companies may try to pass on the cost of their customers by raising prices. Others may choose to eat the cost of the tariff. Businesses can also try to force foreign suppliers to carry the burden by negotiating lower prices for their products.

Then Mr. Trump introduced customs on China during his first period, found economic studies that most of these costs was passed on To American consumers – a scenario that is likely to play out again. This can mean higher prices in grocery vanes, at car dealers and at the pump.

About 60 percent of the oil that the United States imports comes from Canada. Tariffs on Canadian energy, although lower than for other imports, could get an uptick in prices for the pump, especially in the midwest, where the refineries turn Canadian oil into gasoline and diesel.

There is also concern for inflation pressure everywhere. Analysts at Goldman Sachs have said that if Trump continues with tariffs across, it would raise prices in the US and slow economic growth. Most economists expect fresh trade barriers to lead to a temporary burst with higher inflation.

Consumers could see a quick uptick in prices for non -tea goods, including groceries. Most of the avocados in the United States are imported from Mexico and they could become more expensive within a few weeks after the tariffs take effect. Prices for cucumbers and tomatoes can also spike. It may take longer before prices rise for durable goods, such as cars, thanks to the existing stock or if companies expect tariffs to be temporary.

“It may take some time, but if these tariffs are there to stay, these price increases will eventually come,” said Felix Tintelnot, associate professor of economics at Duke University.

How fast companies are willing and able to raise their prices, to see, said Peter Simon, an economics professor at Northeastern University, Saturday. While some price increases may represent a legitimate response to rising costs for businesses, there is also the risk of opportunistic pricing, which means that companies can use customs as an excuse to raise prices even more than necessary, Mr. Simon. An uptick in inflation, he said, is an “inevitable result” of customs.

After joining, Mr. Trump that he would impose on Canada and Mexico customs duties because neighboring countries let “mass number of people come in and fentanyl to come in.” His arguments since the inauguration day – that punishments are needed to stop the flow of migrants and drugs in the United States – follow months of similar threats during his presidential campaign.

Mr. Trump issued the executive orders under a law called International Emergency Economic Powers Act and expanded the extent of a national emergency, which he declared on his first day in office with regard to an “influx of illegal foreigners and illegal drugs.”

Canada and Mexico have already signaled possible retribution. The Canadian government has planned to target orange juice from Florida, Tennessee whiskey and peanut butter from Kentucky, while Mexico’s president, Claudia Sheinbaum, has said her country is prepared to respond with retaliatory gap.

“If the United States moves on, Canada is ready with a strong and immediate reaction,” Prime Minister Justin Trudeau of Canada said on Social Media on Friday.

However, Trump’s executive orders aim to limit the ability of the governments to fight back. The United States may be able to increase its tariffs if countries are reciprocated by introducing their own import duties or taking other measures, according to a clause in the orders.

Prior to Mr. Trump’s announcement on Saturday, US companies did not seem to be in a big haste in bringing shippings from Mexico and Canada, though there was evidence of a Uptick. Efforts to bring in goods before the tariffs probably contributed to an increase in transporting shipping containers over North America by rail for the first four weeks of the year compared to the same period in 2024.

Data released in the weeks before Mr. Trump’s executive orders on Saturday showed modestly higher freight volumes on the way and rail. Transport experts said that for rail and trucking companies, the situation differs from 2021 and 2022, when a flood of import overwhelmed supply chains, which caused shipping costs to skyrocket and help fuel to the acceleration of a rapid inflation.