Trump’s Tariffs Trigger Price Shocks: These Products Will Be Hit Hardest!

On February 1st 2025, U.S. President Donald Trump announced a 25% tariff on all imports from Mexico and most products from Canada, alongside an additional 10% tariff on Chinese goods. These sweeping measures are set to impact a wide range of products, affecting supply chains and consumer prices in the U.S. E2G has summarised the eight major product categories likely to feel the impact the most.

1. Toys, Clothing, and Footwear

According to U.S. federal trade data, key imports from China include mobile phones, computers, home appliances, toys, clothing, and footwear. Over half (56%) of shoes sold in the U.S. are manufactured in China. Additionally, 75% of toys and sports equipment (such as footballs, soccer balls, and baseballs) imported into the U.S. are made in China. The CEO of Barbie revealed that by the end of 2023, nearly half of their toys were produced in China.

As retailers deplete their existing stock, they are expected to gradually pass on the increased tariff costs to consumers. This could lead to noticeable price hikes on these everyday items.

2. Furniture

In 2023, the total value of imported furniture in the U.S. was $32.4 billion, with 29% coming from China and 26.5% from Vietnam, according to the Home Furnishings Association (HFA). Furthermore, up to 50% of raw materials used in furniture manufacturing, including wood, fabric, hinges, and screws, are imported. Consequently, the tariffs are likely to cause a rise in home furnishing prices.

3. Building Materials

The structural frames and exterior walls of most American homes are made of softwood lumber, with lime and gypsum used for wall construction. Annually, 30% of lumber used in the U.S. is imported from Canada, while 71% of lime and gypsum come from Mexico.

According to the National Association of Home Builders, Trump’s new tariffs could increase the cost of imported building materials by $3 billion to $4 billion, impacting housing affordability and construction costs nationwide.

4. Agricultural Products, Including Avocados

In 2023, the U.S. imported $46 billion worth of agricultural products from Mexico, including $8.3 billion of fresh vegetables and $9 billion of fresh fruit. Notably, over 90% of avocados consumed in the U.S. are sourced from Mexico.

Due to drought conditions, avocado exports from Mexico to the U.S. dropped by 26% in the first four weeks of 2024 compared to the same period the previous year. With U.S. supermarkets operating on tight profit margins, the additional tariff costs are expected to be passed on to consumers, leading to price increases for popular fruits and vegetables.

5. Tequila and Whiskey

In 2023, the U.S. imported $4.6 billion worth of tequila from Mexico and $537 million worth of spirits from Canada. Canada and Mexico rank as the second and third largest spirits exporters to the U.S., following the European Union.

The U.S. Distilled Spirits Council warns that the tariffs will hurt American consumers and impact the hospitality industry, which is still recovering from the pandemic. Prices of popular alcoholic beverages could see a significant increase.

6. Automobiles and Auto Parts

More than one-fifth of cars and light trucks sold in the U.S. are produced in Canada or Mexico. In 2023, the U.S. imported $69 billion worth of cars and light trucks from Mexico and $37 billion from Canada. Additionally, auto parts worth $78 billion were imported from Mexico and $20 billion from Canada. Notably, engines for the popular Ford F-Series pickup trucks and Mustang sports cars are manufactured in Canada.

Experts predict that Trump’s tariffs could raise the average price of a car in the U.S. by about $3,000. Currently, the average price of a new car is $50,000, while used cars average $26,000. This could further strain consumers’ budgets in the automotive market.

7. Petrol

Canada is the largest supplier of crude oil to the U.S., exporting $90 billion worth of crude oil to the U.S. from January to November last year, significantly more than Mexico’s $11 billion. According to the U.S. Energy Information Administration, America’s reliance on Canadian oil has grown, particularly following the expansion of the Trans Mountain Pipeline.

Many U.S. refineries depend on specific types of heavy crude oil imported from Canada, especially in the Midwest. Trump’s tariffs could increase U.S. gasoline prices by 30 to 70 cents per gallon, according to TD Bank’s Economic Department, impacting both consumers and businesses reliant on fuel.

8. Steel

The U.S. consumes millions of tonnes of steel annually for industries including automotive manufacturing, oil production, construction, and infrastructure. Data from the American Iron and Steel Institute reveals that nearly a quarter of imported steel in the U.S. comes from Canada, with 12% sourced from Mexico.

During his first term, Trump imposed a 25% tariff on steel imports from most countries worldwide. However, under the USMCA (United States-Mexico-Canada Agreement), Canada and Mexico were exempted from these tariffs. The new measures could reshape the North American steel market and increase production costs across various industries.

Opportunities and Challenges for the Irish Market

Irish e-commerce players should closely monitor the implications of Trump’s new tariffs, as increased import costs on key products like toys, clothing, electronics, furniture, and automotive parts could indirectly impact supply chains and pricing strategies.

Opportunities: The new tariffs imposed by the U.S. present several opportunities for Irish e-commerce players. As American retailers face increased import costs, particularly in categories like clothing, toys, and electronics, Irish businesses could step in to fill the supply gap. This shift creates a favourable environment for local suppliers to expand their market share. Additionally, with Ireland’s strategic position within the EU single market, Irish companies can attract international consumers looking to avoid U.S. tariff-related price hikes, enhancing their competitive edge. Furthermore, these changes encourage Irish businesses to diversify their supply chains, reducing dependency on North American markets and fostering stronger trade ties with other global regions.

Challenges: However, these policy changes also bring potential challenges to the Irish e-commerce and logistics market. If Irish businesses source goods indirectly impacted by U.S. tariffs, they may face increased costs, affecting profitability and pricing strategies. Additionally, disruptions in North American trade flows could lead to logistical challenges, including longer transit times and higher shipping costs for goods routed through the U.S. market. Furthermore, heightened trade tensions could trigger currency fluctuations, impacting international transactions and complicating financial planning for Irish e-commerce companies. To navigate these complexities, strategic logistics management and diversified sourcing will be crucial for maintaining competitiveness and profitability.

To navigate these challenges and maximise potential opportunities, partnering with experienced logistics providers like E2G can provide strategic guidance and tailored solutions.

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(Cover image source: Unsplash)