CHICAGO (WLS) — President Donald Trump’s tariffs on Canada and Mexico may directly impact your household, especially concerning groceries and gas.
In an interview with the ABC7 I-Team, food industry analyst and editor of The Supermarket Guru, Phil Lempert, discussed the potential effects of the tariffs on grocery items, gas prices, and the timeline for possible price increases following the implementation of tariffs on Saturday.
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“Approximately 63% of the vegetables in our market originate from Mexico, while about 50% of the fruits and nuts come from there. Additionally, the meat supply comes from Canada,” explained Lempert. “Unfortunately, these tariffs are not expected to benefit consumers in the near future.”
He said consumers can expect to see price increases for items like avocados, berries, tequila, beer, cooking oil, meat and meat products. And consumers should also brace for higher prices at the pump.
“Gas prices are going to go up. That’s what we get from Canada,” he said. “Also, if you take a look, a lot of our U.S. cars are assembled and parts come from Mexico. So, we’re going to see the price of cars go up.”
The United States imported almost 4.6 million barrels of oil daily from Canada in October and 563,000 barrels from Mexico, according to the Energy Information Administration. U.S. daily production during that month averaged nearly 13.5 million barrels a day.
But as you prepare for these higher prices, Lempert cautioned that there is no need to rush clear grocery store shelves.
“Don’t panic,” he said. “It’s going to take weeks for these things to take effect, whether it’s higher prices, whether it’s shortages.”
But could shelves eventually look the way they did during the height of the pandemic?
“I do think that when we look at our produce department, that’s where we’re going to see empty shelves,” Lempert said. “The one other thing we do get from Canada is fresh cut flowers, so leading up to Valentine’s Day, we might have a shortage of fresh cut flowers as well.”
In a statement to ABC News, a White House spokesperson said in part, “In his second administration, President Trump will again use tariffs to level the playing field and usher in a new era of growth and prosperity for American industry and workers,” White House spokesperson Kush Desai told ABC News.
Trump’s team is urging the public not to look at this under a microscope but rather look at the economic approach as a whole that the president is taking.
A study this month by Warwick McKibbin and Marcus Noland of the Peterson Institute for International Economics concluded that the 25% tariffs on Canada and Mexico and 10% tariffs on China “would damage all the economies involved, including the U.S.”
“For Mexico,” the study said, “a 25% tariff would be catastrophic. Moreover, the economic decline caused by the tariff could increase the incentives for Mexican immigrants to cross the border illegally into the U.S. – directly contradicting another Trump administration priority.”
Cutler, now vice president at the Asia Society Policy Institute, said the extent of the economic damage will depend on how long the tariffs are in effect.
If it’s just a few days, “that’s one thing. If they are in place for weeks onto months, we’re going to see supply chain disruptions, higher costs for U.S. manufacturers, leading to higher prices for U.S. consumers,” she said. “It could have macroeconomic impacts. It could affect the stock market. Then internationally it could lead to more tension with our trading partners and make it harder for us to work with them.”
Stocks on Wall Street surrendered early gains and closed broadly lower Friday after the White House said President Donald Trump would impose promised tariffs on key U.S. trading partners.
The S&P 500 fell 0.5% and the Nasdaq composite dropped 0.3%. The indexes, which had posted solid gains in morning trading, posted their first weekly loss in three weeks.
The Dow Jones Industrial Average fell 0.8%.
The Associated Press contributed to this report.
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