President Donald Trump's new 50% tariffs on Canadian goods went into effect on Wednesday, Aug. 19.
The Trump administration said the move was intended to respond to what it calls Canada's unfair treatment of American exports and to protect U.S. industries. Canada has criticized the tariffs, saying they violate the U.S.-Mexico-Canada Agreement, while trade experts warn the move could increase costs for businesses and consumers on both sides of the border.
Though Canadian and U.S. officials have been in trade talks, they were still far from reaching a new trade deal, officials said Friday.
The tariffs will affect common grocery items like wine and dairy products and a variety of other items like furniture, cement, clothing and more, likely costing
Americans more in the process.
Shikha Jain, a Simon-Kucher partner and lead of the consumer sector for North America, told USA TODAY that this new round of tariffs on Canadian imports takes effect Aug. 19, she expects most retailers will pass cost increases onto consumers over the next three to four months.
“However, the flip side to this is that we know when there are very severe price hikes, or at least a 20% increase in discretionary pricing, about 20% of consumers stop purchasing all together,” Jain said, adding businesses will carefully weigh price increases because if they get “too high, they might not be able to move product.”
What are tariffs?
For consumers, tariffs don't mean Canada pays the extra cost. Instead, the tariff is generally paid by the U.S. importer, which can then pass some or all of the added expense on to shoppers through higher prices.
That means Americans could eventually pay more for some imported goods, particularly if businesses are unable to absorb the additional costs. How much prices rise will depend on whether companies switch suppliers, negotiate lower prices or choose to increase retail prices.
In Arizona, the impact could be felt through higher prices on products made with Canadian materials or imported from Canada, including some building supplies, specialty foods, dairy products and alcoholic beverages.
Businesses that rely on Canadian imports could also face higher operating costs, while consumers may notice price increases over time if those costs are passed along. Economists say the overall effect will depend on how long the tariffs remain in place, whether Canada retaliates with additional trade measures and whether businesses adjust their supply chains.
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How will Trump's tariffs affect Arizona grocery stores?
It is uncertain how much of the increased cost importers will pass on to consumers across all the different impacted industries.
These are some popular groceries from Canada items likely to see price increases:
- Alcohol products including Canadian whisky and wine.
- Dairy products including milk, cream, whey and milk protein concentrates.
- Sweeteners like sugars and cane molasses.
- Paper products including tissues, napkins, paper plates and paper cups.
Additionally, other portions of these tariffs could ultimately affect the production of canned goods and beverages, candies, packaged baked goods and baking mixes, and beer.
What do we import from Canada?
The following common imports from Canada to the U.S., according to the Bureau of Industry and Security and Trading Economics, could be affected by Trump's tariffs:
- Wood.
- Charcoal.
- Aluminum.
- Iron and steel appliances.
- Cereal, flour, starch and milk products.
- Rubbers.
- Alcoholic beverages, including wine.
- Carpets and other textile floor coverings.
- Wool, animal hair, horsehair yarn and fabric.
- Umbrellas, walking sticks, seat sticks, whips.
- Cotton.
- Photographic or cinematographic goods.
- Cork products.
- Printed books.
- Sporting goods like fishing rods and hockey equipment.
USA TODAY reporter Rachel Barber contributed to this article.
This article originally appeared on Arizona Republic: How tariffs on Canada could raise cost of these Arizona grocery items
