How can new tariffs on U.S. and Canada impact prices for Michiganders?
President Trump announced this week that the U.S. will impose a 50% import tax on several Canadian goods, including alcohol, dairy, hockey equipment, and paper and wood products. In response, Canada said it was imposing tariffs of up to 50% on about $20 billion in U.S. imports, such as including video game consoles, perfumes, golf clubs, and fishing rods.
CBS News Detroit is looking into the impact tariffs between the U.S. and Canada will have on Michigan wallets.
U.S. tariffs on Canada affect only roughly 5% of total imports from our northern neighbors, and experts say Michiganders are among those who will feel the impact most. Michigan relies on trade with Canada to support much of its economy. Experts say these new tariffs won't just make Canadian goods more expensive, but also the Michigan-made products that use goods coming from across the border.
"Higher cost of doing business, higher cost of running a farm, higher costs at grocery stores," said Michigan Smart Trade Alliance spokesperson Mark Fisk.
The U.S. placed a 50% tariff on Canadian steel to make cars, lumber to build homes, and numerous consumer products like alcohol, paper goods, and dairy.
"There is no doubt that consumers are going to bear the brunt of the back and forth, the retaliatory tariffs across the border," Fisk said.
New tariffs on lumber are expected to slow the rate of new home construction and make buying a home more expensive.
"It's making a lot of builders now look at it and say, 'Hey, it's just not worth it right now, it's not worth it to develop this subdivision, it's not worth it to have this,'" said Canadian tariff consultant Kyle Peacock.
Other products like fertilizer and gas are exempt from the 50% tax hike, but existing tariffs on those items will still have a ripple on consumer prices, according to experts.
"That's going to be more expensive, passed onto the farmers. Farmers pass that along through the food supply chain, so now we're going to see further higher prices in the grocery store," said Center on Budget and Policy Priorities chief economist Gbenga Ajilore.
Americans have been enduring the short-term pain, and Ajilore says he's skeptical about promises of long-term gains.
"We haven't seen any evidence of that, and now we're 18 months into it, and we're still seeing higher prices, we still have tariffs on a lot of goods," he said.
These experts say Canada's reciprocal tariffs mean that goods like steel and car parts will be hit with import taxes on both sides each time they cross the border on their way to becoming finished cars. They say consumers will ultimately be the ones paying for those extra costs.
