U.S. President Donald Trump's long-threatened tariffs are here, plunging the country into an escalating trade war with China, Canada and Mexico.
Trump’s 25% tariffs on imports from Canada and Mexico went into effect Tuesday, along with a heightened 20% levy on Chinese goods. In response, all three countries announced retaliatory measures.
Experts say consumers and businesses will be the hardest hit. Companies big and small will face higher costs on the goods they buy from other countries — and could have little recourse but to hike prices themselves. For consumers, that will likely mean more expensive price tags on everything from cars, appliances and other big-ticket items to smaller, everyday purchases including electronics, gasoline and groceries.
What to know about the tariffs:
Canada, Mexico and China all declared on Tuesday that they would impose retaliatory taxes on many U.S. products.
China is imposing tariffs of up to 15% on a wide array of key U.S. farm exports, including American-grown chicken, pork, soy and beef. It also expanded the number of U.S. companies subject to export controls and other restrictions by about two dozen.
Meanwhile, Canadian Prime Minister Justin Trudeau announced that his country would slap tariffs on more than $100 billion of American goods over the course of 21 days. And Mexican President Claudia Sheinbaum said her country will respond with its own retaliatory tariffs on U.S. goods. Unlike Canada or China, however, she said she would not announce specific tariffs until Sunday — possibly indicating that Mexico still hopes to de-escalate the trade war.
“All of the economies involved in the tariffs will see a loss in their real GDP (gross domestic product) and increasing consumer prices in general," said Wendong Zhang, an assistant professor of applied economics and policy at Cornell University.
Canada and Mexico will suffer considerably more than the U.S. because of the U.S. economy’s size and strengthening dollar, Zhang added. For the U.S., the combined tariffs on China, Canada and Mexico could result in about a 0.4% GDP loss, amounting to over $100 billion, he said.
The tariffs may be short-lived if the U.S. economy suffers. But Trump could also impose more tariffs on the European Union, India, computer chips, autos and pharmaceutical drugs. The president has injected a disorienting and unpredictable volatility into the world economy, leaving it off-balance as people wonder what he will do next.
Manufacturing companies and retailers for a wide array of goods will feel the impact.
“International trade is critically important to our business and industry," Best Buy CEO Corie Barry said on an earnings call Tuesday. “The consumer electronics supply chain is highly global, technical and complex. China and Mexico remain the No. 1 and No. 2 sources for products we sell, respectively.”
At Target, sales and profits slipped during the crucial holiday quarter as customers held back on spending, and there will be “meaningful pressure” on the company's profits in early 2025 because of the tariffs and other costs, CEO Brian Cornell said at the company’s annual investor meeting Tuesday.
Car companies’ supply chains that cross the borders of the U.S., Canada and Mexico could be disrupted — in addition to auto parts that come from China.
Tariffs on China could impact a variety of consumer products, including cellphones, children’s toys and clothing that Americans buy every day.
Some companies have been working to delay or lessen the blow on consumers by stockpiling what they can or shifting manufacturing and suppliers back to the U.S. — or other countries not impacted by the new levies.
Still, it’s easier to stock up on some goods than others. And even some “made-in-USA” products may contain plastics or packaging from China, for example. Wider supply chain shifts are also complicated and far from easy to carry out.
When it comes to consumer electronics, “We expect our vendors across our entire assortment will pass along some level of tariff costs to retailers, making price increases for American consumers highly likely,” Best Buy’s Corie Barry said.
And with the U.S. spending billions on fruits and vegetables imported from Mexico and Canada each year, shoppers could face additional sticker shock in the grocery aisle. The new tariffs could also hike prices of tequila, mezcal, whiskey and other spirits made in those countries.
Tariffs add another “mental calculus” for consumers on top of other price pressures today — such as soaring egg prices due to avian flu, Zhang says. He adds that shoppers will need to watch prices for everyday items more closely.
Exactly when consumers will see prices rise isn’t clear, but perishables will likely get hit first.
Especially during colder months, retailers rely on foreign imports for fresh fruit and vegetables, and long-term storage isn't an option. Shoppers could start seeing the prices of produce such as avocados, which come from Mexico, go up industrywide as early as in a few days, Target’s Cornell told reporters on Tuesday.
But he added that the extent to which prices will increase depends on how things play out over the next few weeks.
“I think things are unfolding so quickly,” Cornell said. “We will watch this carefully and understand, are these long-term tariffs? Is this a short-term action? How will this unfold over time? I think all of us are speculating, and I think we’re going to listen and learn and make sure that we can control the things we can control. But we don’t want to overreact right now to one day and one headline.”
Associated Press writers Anne D'Innocenzio in New York and Paul Wiseman in Washington, D.C., contributed to this report.
© Copyright 2025 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.
28 Comments
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wtfjapan
markets were litterally tanking in real time once Trump announced his trade war starting.
you got what you voted for , recession is now likely under Trump. markets dropped 4% in two days, still in free fall.
Trump stated in 2012 thats a president should resign of the DOW drops more that 100 points in 2 days, time to resign Donny
wtfjapan
1000 points
I'veSeenFootage
Unfortunately I doubt the relevancy of articles such as these. People with a working brain already know a trade war just drives prices up and serves no useful purpose whatsoever, and the rabid MAGA crowd refuses to listen to any facts that go against what their supreme leader and his mouthpieces told them anyway, so...
itsonlyrocknroll
Trump's tariffs will impact what businesses buy — and sell you — worldwide....
Precisely.
My Father condemns me as a unconscionable idealist.
But President Trump is the here and now.
Even so, Elon Musk is a political diplomatic liabili
Trump/Putin could well be the opposite side of the same coin.
We could soon find out
Tariffs will even the playing field, like it or not.
For global competitors, its will be a bitter pill to swallow.
But a pill that must be taken.
DeeZee
That's my president!!!
Tariffs are gonna make America rich again and everything will become cheaper once Americans start making stuff again...MAGA4LIFE
Deo Gratias
Gentle readers, before you go making the same mistake that "wtfjapan" made, read this:
https://www.politifact.com/factchecks/2025/mar/05/tweets/no-trump-didnt-post-that-the-president-should-be-i/
It details how Trump never, ever, EVER said that a president should resign if the Dow Jones drops by 100 points or 1,000 points, or any points.
So let's nip this in the bud right now, in the hopes that future comments on this thread don't push that bald-faced lie.
Peter Neil
trump and his disciples post bald face and outrageous lies every day.
Peter Neil
“ Deo Gratias Today 11:54 am JST Gentle readers, before you go making the same mistake that "wtfjapan" made, read this:
https://www.politifact.com/factchecks/2025/mar/05/tweets/no-trump-didnt-post-that-the-president-should-be-i/
It details how Trump never, ever, EVER said that a president should resign if the Dow Jones drops by 100 points or 1,000 points, or any points.
So let's nip this in the bud right now, in the hopes that future comments on this thread don't push that bald-faced lie.”
i respect your ability to write your beliefs. at least you don’t seem to be using chatgpt, like what i’ve seen here, after all, this is supposed to be a discussion and not an internet fight.
and i agree, bald faced lies have no place in discussions.
wtfjapan
So let's nip this in the bud right now, in the hopes that future comments on this thread don't push that bald-faced lie.
December: how about claiming the Biden economy was good becuase they know Trump is coming back in office, yes he stated that. go look at the vid
Now the markts are tanking theyre blaming it on Bidens economy also LOL
wtfjapan
Tariffs are gonna make America rich again and everything will become cheaper once Americans start making stuff again...MAGA4LIFE
yet inflation keeps rising, Americans are losing their medicaid and socal security, all the while republcians want to implement anothe massive 4 trillion tax cut for the rich. yeah making the rich richer, maga 4 life LOL
wtfjapan
and the rabid MAGA crowd refuses to listen to any facts that go against what their supreme leader and his mouthpieces told them anyway, so...
the only mouth piece that matters are the markets and consumer confidence, theyre both tanking bad
itsonlyrocknroll
Please, democracy demands, political, across the spectrum consensus.
Dictating one agenda, should never be the American way
No matter your ideology, must be time for a soul search.
Politically, without breath, without careful reflection, without that questioning of a political centre option, could well be a route to an oblivion without the balance, the essential checks and balances
mountainpear
Delusional! The manufacturing ship has long sailed from America!
Sven Asai
Who cares, that balances out, some say it recoils. If a person or company wants or needs a certain foreign product, now with massive tariffs on it, then this someone of course buys it anyway, but then has less available for other domestically produced goods.
virusrex
How does this balances out? what you are describing is that people will get less out of their money since some of the things he buys will get more expensive. The producers of the foreign goods will deal with decreased demand, the consumer with less product for the money he has available and the local producer of unrelated things also get less demand since the consumer has less money remaining to buy things.
justasking
Trump is an ignorant individual. Who would start a trade war with not one country but the whole world and would think there would be no consequences.
Many countries are banning together to trade with one another and leaving out the US. In addition, all the countries that have been hit with tariffs are implementing their own tariffs, and so, hitting all the US companies in their pocketbooks not once but 10 times over.
Trump, you are destroying lives, and breaking every promise you made.
funkymofo
It's just so stupid.
HopeSpringsEternal
Tariffs a DJT tool to either get other countries to lower their tariffs to 'match' US tax rates or reciprocal, move production inside the US OR pay the same tariff imposed by the country of origin exporting to the US market.
Nothing radical about reciprocity, rather matching tariffs, the definition of fairness.
HopeSpringsEternal
Trump mentioned in his Joint Session of Congress Speech today that $1.7 Trillion of incremental investment has already taken place due to Nov 5th, mentioned Apple, TSMC and Softbank Open AI and Oracle etc.
DJT not giving Companies ANY Govt. $, like Biden, money coming into US in order secure lower taxes, energy costs, regulations & AVOID DJT Reciprocal Tariffs
DJT also mentioned China and how they failed follow-thru with Trump 1.0 trade agreement and many countries with high Tariffs like South Korea, India and China and why Steel & Aluminum are vital to US National Security.
commanteer
Ships can sail in two directions - more, even. Countries can go from zero to major manufacturing in 20 years. The real question is whether Americans are willing to work any more.
lincolnman
Welcome to "Trump-flation"....
It's an economic condition worse than regular inflation, because it's "huuuge"....
History again repeats itself - elect a Repub as in 2004 and you get a economic catastrophe and meltdown as in Bush's 2007/8 recession...
But I think Trump will eclipse that...his will be "bigger"....
Just what you voted for, right MAGA-fans? More expensive groceries, gas, vehicles, health care....
But not to worry, you won't have any money to pay for those anyway since Trump and Musk and going to replace you at your job with a lower paid immigrant...
deanzaZZR
Honestly, this is one of the dumbest arguments ever made. First there was a little pandemic that interfered with trade. And more importantly the USA banned the sale of tens of billions of high end chips and other high tech items that China would have gladly bought.
iron man
mmmh, factually not all markets are tanking. I am a reinforced concrete type. But my favourite g'parent once imparted wisdom over a cheap b'fast.. Always remember that anybody can break the bread but only natural chickens can lay the eggs. Has dumpsie laid any fresh eggs yet, or just torn the bread of the breakfast table? Is he targeting the business health, or the world's mental health? Sit tight recessions at the end of 1970. 1980/90, 2007/9, all caused by broken bread. His mistake is not realising some nations are not afraid.
JeffLee
Trump had solid support from the business community, from shopkeeper entrepreneurs all the way to multinational CEOs. This is what they want. How could it be otherwise? Trump said very clearly during his campaign that he was going to do exactly this.
@Japan Glimpsed
THANK GOODNESS
@Japan Glimpsed
Not back-breaking agricultural work, not low-paid work, generally. Business owners that voted for the new administration but rely heavily on such labor.
@Japan Glimpsed
Exactly. Give it a go. Cut off the nose, spite the face. That's how it is. Dunzo.
@Japan Glimpsed
The stock market tanks, savings dessicate, US manufacturers shutter... Well done, you.