
The tariffs on goods that come into the U.S. from Canada and China are set to go into effect 12:01 a.m. Tuesday. The Trump Administration announced Monday that those for Mexico will be delayed for a month after that country agreed to send troops to the border with the U.S.
Goods imported from Canada, meanwhile, will be subject to a 25%, except energy products, which will pay 10%. Those from China will be charged 10% as well. If the tariffs for Mexico imports are enacted, goods made in that country, too, will be subject to a 25% tariff.
If you’re not an economist, you may wonder what this means for you, whether it will cost you money, what goods it will affect and why it’s happening. The tariffs affect 40% of the goods that are imported into the U.S., 28.2% of that from Canada and Mexico.
The rise in inflation the tariffs would cause would be as much as 4%, up from the 2.9% it is now, according to economists.
The amount they will cause the average American will be anywhere from $1,700 (Peterson Institute for International Economics), to $2,500-$3,900 (Center for American Progress).
Canada fired back by imposing a 25% tariff on most goods imported from the U.S., which begins Tuesday. About $2.5 million (in U.S. dollars) worth of goods a day crosses the border between the two countries, and many states that export goods to other countries have Canada at the top of their list. Our northern neighbor has a webpage for Canadians with information about the tariffs and resources.
In response to U.S. concerns about drug smuggling and illegal border crossings, Canada had previously announced it had added $1.3 billion to strengthen border security and the country’s immigration system, and to further reduce drug trafficking, but it didn’t stop the tariffs.
Here are some FAQs that will help you understand the effect of the new tariffs.
Question: What is a tariff?
Answer: Tariffs are fees that a country charges other countries for imports. The money is paid at the border, to the U.S. Customs and Border Protection, and then goes into the General Fund. Even American companies like General Motors and Ford, which manufacture many of their vehicles in Mexico and, to a lesser extent, Canada, have to pay the tariffs on goods they import into the U.S.
Q. How will this affect New Hampshire?
A. New Hampshire’s consumers will see the general effects that all U.S. consumers will (more below), but one specific big impact in the state will be on natural gas prices. New Hampshire gets more than 70% of its natural gas from Canada, according to Unitil. Natural gas that comes into the state from Canada isn’t just for those who use it to heat or power their homes, but it’s also used to power some of the state’s electricity grid.
Don’t discount the effect that Canada’s new tariffs on U.S. goods being exported into their country will have.
New Hampshire’s largest export market is Canada. Granite State companies exported $1.4 billion in goods to Canada in 2023, representing 19% of the state’s total goods exports, according to the U.S. Treasury Department.
Some 2,443 New Hampshire businesses exported goods in 2022 (the latest year available). Of those, 2,091 (86%) had fewer than 500 employees. While businesses can pass on the cost of tariffs to their customers, economists also say that small businesses are the least able to do this, and that the impact of Canada’s new tariffs on the U.S. will hurt small businesses that can’t pass on the costs, or afford the tariffs at all, the most.
Q: If the country gets revenues from tariffs, why don’t economists like them?
A: Most companies raise their prices to cover the costs of the tariffs. While the government makes money off of them, the impact to the average consumer is higher prices. They particularly affect things like fruit and vegetables, which have a short shelf life and thin profit margins. The believe that tariffs create jobs and spur new manufacturing isn’t a 100% guarantee, and the positive effects generally take years. In a global economy, it’s less expensive for America, and its consumers, to import many of the goods it does from other countries. This doesn’t just include something that’s already been manufactured, but things like parts, fabric, metals, and more. It’s also virtually impossible for America to manufacture all of the goods that it imports, given workforce and other realities.
Q: What do we get from Canada, Mexico and China that I’m likely to see higher prices on because of the tariffs?
Hundreds of items, from produce to housing and cars, will be affected. Some companies may swallow some of the costs, but in general, economic analysts say that most items that are affected will rise in price.
One big impact will be on agriculture – Canada and Mexico accounted for $83 billion of the total $196 billion in agricultural goods imported into the country in 2024, according to the U.S. Department of Agriculture.
U.S. consumers may see price hikes on these products, or products that use these products, from Canada, China and Mexico [which we’ve included, despite the delay]:
- Prescription drugs and pharmaceuticals.
- Oil changes, gas prices and the cost to heat or power your home.
- Housing prices, building supplies, paper and wood products – the U.S. gets 38% of its forestry and wood products from Canada.
- Paper products and printed books.
- New cars and car parts – 62% of the cars sold in the U.S. are made in Mexico or Canada.
- Computers and other electronics – 60% of those sold in the U.S. are made in, or have parts from, Mexico or China.
- Appliances – much of the iron and steel used to make them is from Canada.
- Sneakers – 99% are imported, much of that from China.
- Toys, personal goods and anything else made from – or packaged in – plastic.
- Avocados (and guacamole) – 90% of avocados sold in the U.S. come from Mexico.
- Tomatoes, cabbage, lettuce, onions, strawberries, oranges, garlic and many other fruits and vegetables.
- Frozen French fries – the majority of those sold in the U.S. are made in Canada.
- Coffee.
- Beer, from both Canada and Mexico, including Mexican brand Modelo, which two years ago passed Bud Light as the top brand sold in the U.S. and has maintained its top position.
- Cereal, flour, pasta and other wheat and grain-based products.
- Cotton, cotton products and other fabrics.
- Sauces, spices and seasonings.
- Raw sugar
- Dairy products
- Soap, lubricants, wax, candles,
Q: Why is this happening, then, if it’s going to raise prices?
A: The Trump administration has declared an economic emergency, claiming that Canada, Mexico and China aren’t doing enough to slow smuggling of fentanyl and other drugs over the borders, as well as undocumented immigrants. That’s why Mexico’s deal to send troops to its border with the U.S. helped forge a delay.
Trump said last month that foreign drug cartels are “killing 250,000, 300,000 American people per year” through fentanyl overdoses, and his spokesperson Karoline Leavitt said this week, in support of the tariffs, that fentanyl has “killed tens of millions of Americans.” But data reported by many news agencies, drawing from federal statistics, show that while opioid addition is a serious problem that kills many Americans, the recently quoted numbers are wildly exaggerated.
The most recent data show that opioid overdoses – from several drugs, as well as fentanyl – killed an average 114,000 Americans a year in 2022 and 2023, a peak that dropped off last year, with about 90,000 dying in the 12 months between June 2023 and 2024, according to the Centers for Disease Prevention and Control.
Most of the fentanyl that illegally comes over the border is at the southern border. Canada accounts for less than 1% of what comes into the U.S. illegally, according to the U.S. Drug Enforcement Agency. In 2024, 43 pounds of fentanyl was seized at the northern border, compared to 21,100 pounds that was seized coming in from Mexico, according to the DEA.
Most of the fentanyl seized at the southern border is being brought through in vehicles, a large portion of it by American citizens, law enforcement has said.
According to the DEA, the amount of fentanyl seized in 2024 at the Mexico border was 20% less than in the previous year, as Mexico President Claudia Sheinbaum has increased enforcement against drug cartels and has cooperated with the U.S. on going after them, even prior to the deal she struck with the Trump administration Monday.
China’s role in all this is that a lot of the chemicals used to make fentanyl in Mexico come from China. The country last year began go crack down on that, under pressure from the Biden administration.
The tariffs obviously wouldn’t be on drugs that are being illegally smuggled, but Trump says they are a way to pressure Canada, Mexico and China to address the issue.
Aside from the political aspect, advocates of tariffs say that they encourage more U.S. manufacturing and increase jobs and wages. Economists say that “trickle down” theory doesn’t generally hold true, though. The impact of the tariffs is felt almost immediately, which those benefits may take years to evolve, if at all.
Q. What’s the deal with President McKinley? Didn’t tariffs work for him?
A. Trump has cited President William McKinley and his “success” with tariffs at boosting the country’s economy in the 1890s, but that’s not actually what happened. The Tariff Act of 1890 put duties as high as 50% on some goods, and was championed by McKinley, who was an Ohio congressman and chair of the Ways and Means Committee at the time. The move was hugely unpopular with Americans, who didn’t like the high prices the tariffs caused. Voters reacted, leading to a blue wave for the U.S. House in the 1890 election and a rewriting of the tariffs act to make it more specific and workable, and less costly.
By the time McKinley became president, in 1897, he’d changed his tune and, while still supporting tariffs, favored a more reciprocal approach to trade.
The economic surge of the 1890s was actually in spite of tariffs, not because of them, and much of it is attributed to the country’s huge surge in immigration. American production skyrocketed because of all the cheap labor, lack of labor laws, and long hours immigrants worked, making it less necessary for the U.S. to import goods.
Q. Did you ever see “Ferris Bueller’s Day Off”? It has a great lesson about tariffs.
A. Yes, a good lesson in why it’s important to pay attention. Anyone? Anyone?