Autos, electronics: What will Trump's tariffs impact?
WASHINGTON, United States — US President Donald Trump's sweeping tariffs on Canada and Mexico are set to roil supply chains for products ranging from automobiles to avocados -- with industries girding for cost increases.
US imports from both countries covered nearly $900 billion in goods as of 2023, and supply lines between the three North American neighbors -- who share a trade agreement -- are deeply integrated. Fresh tariffs would pose complications for businesses with a footprint across one or more countries.
Analysts expect Trump's 25 percent across-the-board tariffs on Canada and Mexico would hit the automobile and electronics sectors hard.
While Canadian energy exports have a lower 10 percent rate, this still marks an uptick as Washington previously did not impose tariffs on Canadian oil imports.
Mexico and Canada also account for significant US agriculture imports, meaning the duties could add to prices of popular foods like avocados and tomatoes.
Nearly 80 percent of Canadian goods exports go to the United States, amounting to some $410 billion in value, according to Statistics Canada.
The levies will hit Canadian vehicle and energy industries hard, given that they represent over 40 percent of Canada's exports to the United States.
The energy exports involve mainly crude oil and bitumen, alongside natural gas.
The auto sector in Ontario -- the nation's most populous province -- faces particular challenges.
This is because "various parts cross the border multiple times before ending up in a finished product," said Robert Kavcic, at Bank of Montreal, in a research note.
The United States imports construction materials from Canada, too, meaning tariffs could drive up housing costs.
More than 70 percent of imports of two key materials homebuilders need -- softwood lumber and gypsum -- come from Canada and Mexico, said National Association of Home Builders chairman Carl Harris.
"Tariffs on lumber and other building materials increase the cost of construction and discourage new development," he said.
Mexico's exports to the United States represented 84 percent of the goods it sold to the world last year, according to its National Institute of Statistics.
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