On March 4, 2025, the Donald Trump administration put new tariffs on trade, including a hefty 25% duty on goods imported from Mexico and Canada, along with an additional 10% tax on Chinese imports. This move adds to the already existing tariffs on Chinese goods introduced about a month earlier, marking the beginnings of what may evolve as significant trade tensions among North America and China.
Following these new measures, Canada announced its plans to counter with tariffs on American goods, targeting products like alcohol, clothing, and appliances. China retaliated by imposing tariffs on various agricultural items, including chicken and wheat. Mexico is also set to respond with similar measures, which could have cascading effects on international trade.
For many businesses, the instatement of these tariffs is alarming. Paul Weismann, president of Healthy Avocado, speaks from experience, importing over 1 million boxes of avocados annually. The impact of the tariffs is particularly concerning for Weismann, who noted, “The prices for Super Bowl were twice what they were last year.” He fears consumers may have reached their price tolerance threshold for avocados, asking, “Will consumers pay $3 or $4 each for an avocado? I don’t think so.”
According to Weismann, the uncertainties caused by these tariffs could affect prices and availability as they await responses from Mexican farmers. Adding fuel to the fire, Erica York, vice president of federal tax policy at the Tax Foundation, pointed out the uncertainty surrounding these trade policies as potentially more damaging than the immediate financial consequences of the tariffs themselves. “If you’re a business trying to plan a long-term investment, you’re going to sit on your hands,” she noted. This growing trepidation hampers business investments and impedes overall economic growth.
The ramifications of these tariffs extend beyond just immediate price increases. Chip McElroy, president of McElroy Manufacturing located in Tulsa, Oklahoma, raises alarms of how supply chains may be affected. His company relies heavily on components from Canada and Mexico to manufacture construction equipment, with the majority of finished exports going back to those regions. “There is an influx of Chinese equipment, but is, well, let’s just say Chinese-priced.” McElroy's focus now is on recalibrated pricing of the components he sources, as he strives to assess the new financial impact stemming from the tariffs. “Job 1 is to gain some clarity on what actual impact these tariffs are going to have,” he expressed.
Looking at the broader scale, the tariffs serve as additional pressures on international relationships reinforcing the idea of protectionism rather than seeking collaborative trade strategies. Trade dynamics have developed significantly over the years, and as York articulated, “We don’t really see them snap back overnight.” Uncertainty now looms large over future trade operations, making procurement arduous for many companies and could impact American competitiveness.
With these current developments, it isn’t just the financial toll the tariffs can impose but also the broader threat they pose to longstanding business relationships developed over years. The reality is many businesses are anxiously watching the tide shift as retaliatory tariffs come to life, impacting various sectors, including agriculture, manufacturing, and more.
Marketplace remains dedicated to informing its audience throughout these turbulent times, emphasizing the importance of remaining aware of the changes impacting personalized finances and business landscapes. The complex interplay of tariffs and retaliatory measures can have lasting repercussions, not only on commodities and pricing but also on the very foundations on which businesses operate globally.