Trump tariffs hit China, Canada and Mexico: See how tariffs work, which goods are impacted

Carlie Procell , Ramon Padilla , Dian Zhang Paste BN

President Donald Trump’s tariffs of up to 25% on imports from Canada and Mexico took effect today, while tariffs on some Chinese goods have doubled to 20%. These countries are the United States’ largest trading partners, providing more than two-fifths of the foreign goods consumed in the U.S., according to a Paste BN analysis of Census trade data. The three countries are hitting back. China has imposed up to a 15% tariff on certain U.S. products. Canadian Prime Minister Justin Trudeau said that his country will introduce a 25% tariff on U.S. goods, while Mexico plans to announce its retaliatory tariffs on Sunday.

What is a tariff?

A tariff is a tax on goods received or imported from another country. Tariffs usually make goods from other countries more expensive and are intended to encourage people to buy goods made in their own country. Here's how tariffs in the U.S. work and how they may impact you:

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What is the status of the proposed tariffs?

There is currently a 20% tariff on Chinese imports and 25% tariffs on Canadian and Mexican imports as of March 4.

An initial 10% tariff on Chinese imports went into effect Feb. 4, but the North American countries were spared for 30 days after Canadian and Mexican officials negotiated with Trump and agreed to improve border security.

As part of its announcement on Feb. 4, China's foreign ministry said it was starting an anti-monopoly investigation into Alphabet Inc.'s Google. It also included PVH Corp., the holding company for brands including Calvin Klein, and U.S. biotech company Illumina, on its "unreliable entities list," a designation that can damage a firm's competitiveness by subjecting it to fines and making it harder for foreign employees to get visas. China's commerce ministry accused the firms of "discriminatory measures against Chinese enterprises," without elaborating.

As part of Trump's executive orders imposing tariffs on Mexico, Canada and China, he also halted the "de minimis" trade loophole that allows low-value packages to come in duty-free from China and other countries, Reuters reported. Retailers Shein and Temu may raise prices, as together they account for more than 30% of packages shipped to the U.S. under "de minimis," according to Reuters. The U.S. Postal Service announced it will continue accepting all inbound mail and packages from China and Hong Kong from Feb. 5, quickly reversing the suspension that went into effect Feb. 4.

How many imported goods will be impacted in the US?

The U.S. relies heavily on goods from Canada, China and Mexico, which accounted for 40% of all our imports in recent years.

If the proposed tariffs on goods from Mexico take effect, Americans may have to pay more for certain fruits, vegetables and alcohol products. Tariffs on Canadian goods could lead to higher prices for steel, lumber and grains.

How could these tariffs affect you? What industries will be most affected?

As the prices rise on imported goods, the price of domestic goods may also rise due to reduced competition. There could also be a scarcity of imported goods because they may become too expensive to import. Jobs in industries that rely on imported goods, like automotive manufacturing and residential construction, could also face losses. Some of the hardest-hit sectors include toys, fuel, transportation, electronics, footwear, and food.

Paste BN analyzed the trade data published by the U.S. Census Bureau and looked at trade values across commodity sectors based on classifications from a study by the Peterson Institute for International Economics.

A staggering 74% of U.S. imports of toys and sports equipment came from China ‒ so did 40% of imported footwear and headgear. Even when toys are designed in the U.S., most of them are manufactured in China. Eight out of 10 toys sold in the U.S. are made in China, according to the Toy Association, an industry group based in New York City.

Electronics ‒ a category of goods already experiencing high tariff rates ‒ may face even greater impacts, with 44% of imports coming from China and Mexico combined.

Canada supplied 51% of the U.S.'s imported fuel and, together with Mexico, supplied 44% of the U.S.’s imported vegetable products, making these essential commodities potential flashpoints for rising costs. According to the Congressional Research Service, Canada and Mexico accounted for over 71% of U.S. crude oil imports, with Canada alone contributing nearly 60%. Crude oil is liquid petroleum extracted directly from the earth and can be used for burning as fuel or for processing into chemical products.

Here's a list of the top product categories imported into the U.S. from each country threatened with tariffs:

Mexico

◾ Transportation equipment (32%)

◾ Vegetable products (28% by itself and 44% combined with Canada)

◾ Prepared food (22% by itself and 42% combined with Canada)

◾ Machinery (21%)

◾ Electronics (18% )

China

◾ Toys (74%)

◾ Footwear and headgear (40%)

◾ Electronics (25% by itself and 44% combined with Mexico)

◾ Textiles and clothing (25%)