{"id":251471,"date":"2025-03-04T13:30:08","date_gmt":"2025-03-04T13:30:08","guid":{"rendered":"https:\/\/news.talkwithrattan.com\/index.php\/2025\/03\/04\/how-trumps-tariffs-could-cost-consumers-in-the-us-and-uk-even-if-he-spares-britain\/"},"modified":"2025-03-04T13:30:08","modified_gmt":"2025-03-04T13:30:08","slug":"how-trumps-tariffs-could-cost-consumers-in-the-us-and-uk-even-if-he-spares-britain","status":"publish","type":"post","link":"https:\/\/news.talkwithrattan.com\/index.php\/2025\/03\/04\/how-trumps-tariffs-could-cost-consumers-in-the-us-and-uk-even-if-he-spares-britain\/","title":{"rendered":"How Trump’s tariffs could cost consumers in the US and UK – even if he spares Britain"},"content":{"rendered":"
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From midnight on Monday, Donald Trump’s tariffs on Mexico, Canada, and China came into effect. But what are they and what do they mean for the UK?<\/p>\n

The second-time president claims the tariffs – taxes on goods imported into the US – will help reduce illegal migration and the smuggling of the synthetic opioid fentanyl to the US.<\/p>\n

In a White House speech on Monday<\/strong><\/a>, Mr Trump confirmed 25% tariffs on goods from Mexico and Canada and the doubling of tariffs on Chinese imports – from 10% to 20%. Canadian energy will be levied at 10%, he added.<\/p>\n

China responded immediately, with 15% taxes on food and agricultural products it sends to the US – worth around $21bn (\u00a316.5bn).<\/p>\n

Canadian Prime Minister Justin Trudeau also retaliated with extra tariffs worth $100bn (\u00a378.7bn) over the next 21 days. Mexico has not yet announced any countermeasures.<\/p>\n

Both Mexican President Claudia Sheinbaum and Mr Trudeau have promised extra troops at their US borders to combat illegal migration, in a bid to stop an all-out trade war with Mr Trump.<\/p>\n

But he appears determined to go even further, targeting other countries, including those in the European Union, which he claims was created to “screw” the US.<\/p>\n

Will Trump target UK with tariffs?<\/strong><\/p>\n

No new US tariffs have been announced on the UK.<\/p>\n

And Prime Minister Sir Keir Starmer’s successful White House<\/strong><\/a> visit raised hopes Britain could avoid Mr Trump’s recent wave of them.<\/p>\n

“I think there’s a very good chance that in the case of these two great, friendly countries, I think we could very well end up with a real trade deal where the tariffs wouldn’t be necessary. We’ll see,” the president told reporters afterwards.<\/p>\n

Mr Trump is largely concerned with trade deficits – when you import more goods from another country than you send there in return.<\/p>\n

The US does not have a trade deficit with Britain – so UK ministers have previously suggested this could be good news for avoiding new levies.<\/p>\n

Ed Conway analysis:<\/strong>
How UK could avoid Trump’s trade war by accident<\/strong><\/a><\/p>\n

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How Trump’s tariffs will affect Britain<\/span>
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Why tariffs could cost you – even if Trump spares UK<\/strong><\/p>\n

But even if no tariffs are put on UK exports, consumers will still be impacted by the wider trade war.<\/p>\n

Mr Trump’s Monday announcement sparked an immediate downturn in US and European stocks, with share prices for car manufacturers, including General Motors, which produces a lot of its trucks in Mexico, falling in particular.<\/p>\n

Economists believe that tariffs will raise costs in the US, sparking a wave of inflation that will keep interest rates higher for longer. The US central bank, the Federal Reserve, is mandated to act to bring inflation down.<\/p>\n

More expensive borrowing and costlier goods and services could bring about an economic downturn in the US, the world’s largest economy – and global movements could hit the UK.<\/p>\n

Forecasts from the National Institute of Economic and Social Research (NIESR) predict lower UK economic growth due to higher global interest rates.<\/p>\n

It estimates UK GDP (a measure of everything produced in the economy) could be between 2.5% and 3% lower over five years and 0.7% lower this year.<\/p>\n

Read more:
Trump pauses military aid to Ukraine<\/a><\/strong>
Analysis: Fine line between negotiations and blackmail<\/strong><\/a><\/p>\n

Some economists argue, though, that the UK might not be hurt too badly – even if Mr Trump imposes tariffs on British goods.<\/p>\n

The UK doesn’t send a lot of goods to the US, exporting its banking and consulting services to them instead, which do not tend to be subject to tariffs.<\/p>\n

However, the Centre for Inclusive Trade Policy thinktank said a 20% across-the-board tariff, impacting the UK, could lead to a \u00a322bn reduction in exports in the UK’s US exports, with the hardest-hit sectors including fishing and mining.<\/p>\n

How will it impact US consumers?<\/strong><\/p>\n

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\n The flags of Mexico, the United States and Canada. Pic: Reuters
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Although the Trump administration said the 10% Canadian energy tariff will boost domestic energy production, there are likely to be wide-ranging negative consequences for the US consumer.<\/p>\n

Economists argue supply chains will be disrupted and businesses will suffer increased costs – leading to an overall rise in prices.<\/p>\n

Both Mexico and Canada rely heavily on their imports and exports, which make up around 70% of their Gross Domestic Products (GDPs), putting them at even greater risk from the new tariffs.<\/p>\n

China only relies on trade for 37% of its economy, having made a concerted effort to ramp up domestic production, making it relatively less vulnerable.<\/p>\n

Avocados – and other fruit and veg<\/strong><\/p>\n

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\n Avocados from Mexico at a store in the US. Pic: Reuters
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The US imports between half and 60% of its fresh produce from Mexico – and 80% of its avocados, according to figures from the US Department of Agriculture.<\/p>\n

Canada also supplies a lot of the US’s fruit and vegetables, which are mainly grown in greenhouses on the other side of the US border.<\/p>\n

This means new tariffs will quickly be passed on to consumers in the form of higher prices.<\/p>\n

The US still grows a considerable amount of its own produce, however, so the changes could boost domestic production.<\/p>\n

But economists warn an overreliance on domestic goods will see those suppliers increase their prices too.<\/p>\n

Petrol and oil prices<\/strong><\/p>\n

Oil and gas prices are likely to be impacted – as Canada provides around 60% of US crude oil imports and Mexico roughly 10%.<\/p>\n

According to the US Energy Information Administration, the US received around 4.6 million barrels of oil a day from Canada last year – and 563,000 from Mexico.<\/p>\n

Most US oil refineries are designed specifically to process Canadian products, which would make changing supply sources complex and costly.<\/p>\n

Oil tariffs could see an increase in fuel prices of up to 50 cents (40p) a gallon, economists have predicted.<\/p>\n

Cars and vehicle parts<\/strong><\/p>\n

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\n General Motors plant in Ramos Arizpe, Mexico. Pic: Reuters
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The US car industry is a delicate mix of foreign and domestic manufacturers.<\/p>\n

The supply chain is so complex that car parts and half-finished vehicles can sometimes cross the US-Mexico border several times before they are ready for the showroom.<\/p>\n

If this continues, the parts will be taxed every time they move countries, which will lead to an even bigger increase in prices.<\/p>\n

As a result, Gustavo Flores-Macias, public policy professor at Cornell University, says “the automobile sector, in particular, is likely to see considerable negative consequences”.<\/p>\n

To mitigate this, General Motors has said it will try to rush through Mexican and Canadian exports – while brainstorming how to relocate manufacturing to the US.<\/p>\n

Mr Trump said of this dilemma on Monday: “They’re going to have a tariff. So what they have to do is build their car plants, frankly, and other things in the United States, in which case they have no tariffs.”<\/p>\n

Electronic goods <\/strong><\/p>\n

When Mr Trump imposed a 50% tariff on imported washing machines during his first term in 2018, prices suffered for years afterwards.<\/p>\n

China produces a lot of the world’s consumer electronics – and smartphones and computers specifically – so tariffs are likely to have a similar effect on those devices.<\/p>\n

The Biden administration tried to legislate to promote domestic production of semiconductors (microchips needed for all smart devices) – but for now, the US is still heavily reliant on China for its personal electronics.<\/p>\n

This will mean an increase in prices for electronics consumers globally – unless tech companies can relocate their operations away from Beijing.<\/p>\n

Boost for the steel industry<\/strong><\/p>\n

The sector that could actually benefit from the Trump tariffs is the steel and aluminium industry.<\/p>\n

It has long been lobbying the US government to impose levies on foreign suppliers – claiming they are dominating the market and leaving domestic factories without enough business and at risk of closure.<\/p>\n

Steel imports increasing in price could therefore promote domestic production – and possibly save some of the plants.<\/p>\n

But when Mr Trump increased steel tariffs during his first term, prices also increased – which business leaders said forced them to pass on costs and left them struggling to complete construction projects on budget.<\/p>\n<\/p><\/div>\n


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From midnight on Monday, Donald Trump’s tariffs on Mexico, Canada, and China came into effect. But what are they and what do they mean for the UK? The second-time president claims the tariffs – taxes on goods imported into the US – will help reduce illegal migration and the smuggling of the synthetic opioid fentanyl […]<\/p>\n","protected":false},"author":2,"featured_media":251472,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"tdm_status":"","tdm_grid_status":"","fifu_image_url":"https:\/\/e3.365dm.com\/25\/02\/768x432\/skynews-donald-trump-tariffs_6818624.jpg?20250203141209","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[2942,2438,5996,64090,18165,1734],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts\/251471"}],"collection":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/comments?post=251471"}],"version-history":[{"count":1,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts\/251471\/revisions"}],"predecessor-version":[{"id":251473,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts\/251471\/revisions\/251473"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/media\/251472"}],"wp:attachment":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/media?parent=251471"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/categories?post=251471"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/tags?post=251471"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}