Experts predict that the tariffs imposed by the U.S. on China, Mexico, and Canada will act as a boomerang, driving up retail prices for groceries, beer, automobiles, and more, ultimately burdening American consumers. Specifically, tariffs are expected to raise car prices by an average of over $3,000 and beer prices by up to 12%.

As inflation worsens, speculation is growing that the Federal Reserve (Fed) may forgo interest rate cuts entirely this year.

The Washington Post (WP) reported on the 3rd, “With high tariffs imposed on Mexico and Canada—countries deeply intertwined with the U.S. economy—the prices of food items and beverages favored by Americans, from beer to berries and broccoli, could rise dramatically.” Additionally, tariffs on Chinese goods, still indispensable in American households as products from the ‘world’s factory,’ have increased to 20%, further straining consumers’ finances.

Analyses indicate that products from China, Canada, and Mexico account for at least 40% of U.S. imports.

JPMorgan analysts estimate that tariffs on Canada and Mexico will add an average of $3,125 per vehicle. Car prices in the U.S. surged during the COVID-19 pandemic due to parts shortages, with the average price reaching about $44,000—a 25% increase since 2019. The auto industry fears a sharp decline in sales if the average price of new cars approaches $50,000 due to tariffs.

Tomatoes, berries, bell peppers, cucumbers, and broccoli—staples on American tables—are largely imported from Mexico. Approximately half of the U.S.’s imported fruit and two-thirds of its imported vegetables come from Mexico. Notably, the majority of imported beer is also Mexican.

Major retailers warned on the 4th that they could face price hikes within days due to the tariff impact. Brian Cornell, CEO of retail giant Target, stated, “If 20% or 25% tariffs are imposed, prices will inevitably rise,” adding, “This will particularly affect the prices of strawberries, avocados, bananas, and more.”

Cori Barry, CEO of electronics retailer Best Buy, noted, “The supply chain for electronics heavily relies on China and Mexico,” pointing out that “55% and 20% of products depend on supply chains from China and Mexico, respectively.”

On the 3rd, President Trump announced that tariffs on all foreign agricultural products would take effect starting April 2. This move will weaken the price competitiveness of foreign agricultural products, including those from Korea, in the U.S. market. Korean Americans will likely face higher prices for Korean food products like ramen.

The U.S. is the largest market for K-food. Last year, Korea’s agricultural and food exports to the U.S. reached $1.59 billion, up $280 million (21%) from the previous year’s $1.31 billion, making it the top export destination.

While more than half of vehicles in the U.S. are manufactured domestically, Mexico is the leading exporter of imported finished cars. Even Tesla, Elon Musk’s electric vehicle company, relies on Mexican parts and components for about 20% of its production.

<Hwandong Cho>