Trump’s tariffs on Canada & Mexico are now in effect. How could they impact NC buyers?
Editor’s note: This story was originally published on Monday, March 3. Some information may be outdated.
President Donald Trump’s proposed tariffs on goods from Canada, Mexico and China have taken effect.
On Monday, March 3, Trump confirmed that the 25% tariffs on Mexico and most goods from Canada, along with an additional 10% tariff on Chinese products would be implemented just after midnight, The Associated Press reported. A 10% tariff on Chinese goods has been in place since early February.
A tariff is a tax applied by governments on imported goods, according to the International Trade Administration.
Confirmation of the tariffs, which sent major stock indexes tumbling Monday afternoon, comes about a month after Trump initially outlined plans for the taxes:
- Feb. 1: Trump issued executive orders announcing a 10% tariff on goods from China and Canadian energy resources and a 25% tariff on imports from Canada and Mexico. The reason, according to the executive orders, was to stop the flow of fentanyl and curb immigration into the U.S.
- Feb. 2: Canadian Prime Minister Justin Trudeau announced a 25% retaliatory tariff on $155 billion of U.S. goods in response to Trump’s executive order.
- Feb. 3: The U.S. decided to delay the tariffs against Mexico and Canada, which had “taken immediate steps designed to alleviate the illegal migration and illicit drug crisis through cooperative actions.” Canada also agreed to delay its retaliatory tariffs on the U.S.
- Feb. 4: China announces retaliatory tariffs on U.S. exports, including coal, natural gas and crude oil.
- March 3: Trudeau, the Canadian prime minister, said the country will impose 25% tariffs on $155 billion of American goods. Tariffs on $30 billion of U.S. goods would begin immediately (March 4), and tariffs on the remaining $125 billion of products would start in 21 days.
- March 4: Mexico President Claudia Sheinbaum said Mexico will impose retaliatory tariffs on the United States, the Associated Press reported. Goods targeted by the tariffs are expected to be announced Sunday, March 9.
- March 4: China announced it would stop importing logs and soybeans from the U.S. and that it would impose broad tariffs on food imported from the U.S., The New York Times reported. China’s Ministry of Finance promised “tariffs of 15 percent on imports of American chicken, wheat, corn and cotton and 10 percent tariffs on other foods, ranging from soybeans to dairy products.” In addition, 15 U.S. companies can no longer purchase products from China.
- March 5: After talks with Ford, General Motors and Stellantis, Trump announced a one-month exemption on new tariffs on imports from Mexico and Canada for U.S. automakers, The Associated Press reported.
- March 6: Trump announced that tariffs on imports from Mexico will be delayed until April 2. “I did this as an accommodation, and out of respect for, President Sheinbaum,” he wrote on Truth Social.
How will tariffs affect NC residents?
While the tax is levied on the importer, it’s often the consumers who end up paying for the tax, said Robert Handfield, a distinguished professor of supply chain management at North Carolina State University.
“Essentially, it doesn’t come out of the company’s margins,” Handfield told The News & Observer in a phone interview. “They just simply tack it on to their price, and add the tariff onto their price, so the consumer ends up paying for that tariff.”
Even if a company can find alternative sources for goods, including domestic sources, or absorb costs in some other way, costs are still generally passed onto consumers, Handfield said.
For example, when the U.S. placed tariffs on China in 2018, U.S. consumers ended up paying more for those items, Andrew Greenland, an assistant professor of economics at N.C. State, told The N&O.
When the tariffs expired, prices for the taxed items fell, according to Felix Tintelnot, an economics professor at Duke University.
“In practice, for the foreign country to actually end up eating the costs of these tariffs, they can’t have other options,” Greenland said. “They can’t have anybody else to sell to.”
If the tariffs stay in place for a long time, it could lead to a “negative trifecta,” said Mike Walden, a distinguished professor and extension economist with NC State: higher prices, higher unemployment and slower economic growth.
Which goods may become more expensive for NC residents?
Since North Carolina buys around $7 billion in products from China annually, the prices of goods like cell phones, computers, toys and lithium batteries will likely increase, Walden said.
Tariffs on Mexico could lead to more costly fruits and vegetables, Walden said, also pointing out that automobile prices could increase since the country has emerged as a leading vehicle manufacturer.
“There’s a very tight integration between the United States, Canada and Mexico for automotive,” Handfield said. “Automotive parts go back and forth between all three borders because they’re very tightly integrated, so tariffs would really cause the automotive manufactured parts to go up, particularly for smaller cars — a lot of those are produced in Mexico.”
President Trump imposing tariffs on Canada could result in higher lumber and gas prices for North Carolina residents, Walden and Handfield said.
“We buy a heck of a lot of oil from Canada. It’s called heavy oil, and our refineries are geared to deal with that heavy oil,” Walden said. “That’s not something you can switch on and off easily.”
How much will prices increase for NC residents?
Price increases from tariffs depend on the product and how much cost the manufacturer passes onto the consumer, John Connaughton, an economics professor at UNC Charlotte, told The Charlotte Observer.
While you might see a slightly higher bill after pumping gas or getting your weekly groceries, Connaughton said, you would see a more noticeable price hike for larger purchases you wouldn’t buy every day, like appliances and cell phones.
“If consumers can switch [sellers] easily, then they can make the seller eat some of the cost of the tariff. But if sellers can switch easily to different buyers, they can make consumers take it,” Greenland said. “And it’s really those two things at play that tell you, for any one of these goods, how much these prices are going to go up.”
Prices for certain grocery items have already been increasing. The cost of eggs and dairy products, for instance, have been on the rise as bird flu spreads.
When could NC residents see price increases?
Opinions about when consumers may see price increases are varied.
Walden said price hikes could occur “very quickly,” likely within a week from when the tariffs go into effect. But Greenland said prices could rise sooner, because anticipatory responses to tariffs have been documented.
Handfield pointed out that some companies have stocked up on inventory as a buffer against anticipated increased prices.
This story was originally published March 3, 2025 at 5:10 PM with the headline "Trump’s tariffs on Canada & Mexico are now in effect. How could they impact NC buyers?."
