Tariffs could bring a spike in car, grocery prices — and soon

President Donald Trump’s threats to impose tariffs on imports from the U.S.’s three largest trading partners are likely to slow down production and drive up prices, even if he reaches deals to temporarily pause them, as he did in the case of Mexico.

Trump’s decision to levy 10% tariffs on imports from China and 25% tariffs on imports from Mexico and Canada created uncertainty that is likely to raise prices until a permanent solution is found, said Mike Skordeles who is the head of U.S. economics at Truist.

But while prices are expected to increase across the board, some items will see a price bump more quickly than others. For instance, consumers are likely to pay more for perishable foods sooner than they will pay more for their cars.

The U.S. received 51% of its fresh fruit and 69% of its vegetables from Mexico in 2022, according to the U.S. Department of Agriculture. A one-month pause on 25% tariffs for those items doesn’t mean their prices won’t go up.

“If I was a producer, I’d say I need to get a little more for that stuff because there is a risk it might get shut down in a month,” Skordeles said.

In theory, companies can stockpile some amount of car parts. They can’t stockpile avocados which spoil within a week.

However, Dr. Michael Swanson, a Wells Fargo Agri-Food Institute chief agricultural economist, said those price increases might not reach your grocery store until after this weekend’s Super Bowl. There may still be time to grab ingredients for guacamole.

“It’s unlikely that changes in tariffs will impact prices headed into the Super Bowl, however, we’ll see how it plays out in the coming weeks,” Swanson told USA TODAY. “This is certainly the year for consumers to stay food fluent.”

More: What items will cost more? What to know about Trump’s tariffs on Canada, Mexico, and China

Trump’s 10% tariff on Canadian oil, which Skordeles said equates to a roughly 16 cent increase per gallon, could eventually raise the price of almost everything as companies need fuel to transport their products across the country. Retaliatory actions by the three U.S. trade partners are also likely to stir up trouble for American companies.

“This is a mess,” Skordeles said. “There are so many unintended consequences.”

Tariffs are a tax on the exchange of goods between countries, largely paid for by American companies in this instance. In a world where free trade in North America has been a given for decades, many supply chains, particularly those for cars, involve goods moving across borders before a product is ready to be sold to American consumers.

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