U.S. Consumers To Pay More For Cars, Food, Lumber, And Oil

Americans could soon face higher prices on everything from automobiles to avocados after the Trump administration imposed steep new tariffs on the nation’s three largest trading partners.

Economic experts warn that U.S. consumers will ultimately pay the price for the barrage of tariffs. I Photo: Chevrolet Facebook

While President Donald Trump insists that foreign countries will bear the costs of these tariffs, economic experts warn that U.S. consumers will ultimately pay the price, Aimee Picchi reported for CBS News.

The Tax Foundation explains that tariffs are not paid by exporting countries, as Trump has wrongly claimed, but by U.S. importers who then pass the costs on to businesses and consumers.

This reality contradicts Trump’s assertion that tariffs will generate massive revenue for the U.S. government.

"If there is a significant increase in tariffs, those costs will likely be passed onto U.S. consumers and businesses," said Brian Peck, executive director of the University of Southern California’s Center for Transnational Law and Business, in an interview with CBS Los Angeles.

Peck noted that Canada supplies the U.S. with key commodities such as oil, lumber, wood, and cement, while more than 20% of U.S. agricultural imports come from Mexico.

Since Canada provides approximately 20% of the oil used in the U.S., a 25% tariff on Canadian imports could increase gasoline prices by 30 to 40 cents per gallon within days of implementation, according to Patrick De Haan, head of petroleum analysis at GasBuddy.

However, Wendong Zhang, an assistant professor of applied economics and policy at Cornell University, said that while a 25% tariff could cause Canada and Mexico to lose 3.6% and 2% of their real GDP, respectively, the impact on the U.S. would be far less severe—just a 0.3% decline—due to the relative size of the American economy.