Grand Canyon Institute researcher: Effects of tariffs on Canada and Mexico could be felt before the Super Bowl
Expert shares predictions of effects from new tariffs
An expert with the Grand Canyon Institute shares his predictions of what widespread tariffs on other countries could mean for the price of goods in the U.S. FOX 10's Nicole Krasean has more.
PHOENIX - Grand Canyon Institute researchers say trade with Mexico makes up about 2.5% of our country's GDP, totaling close to a trillion dollars.
He predicts we will see the effects of any tariffs enacted by the federal government against Mexico, Canada and China before we know the results of the upcoming Super Bowl.
Why you should care:
"You might actually see the price of your avocados jump up a bit," said Dave Wells, research director at GCI. "Your Mexican beer, that might also jump."
Wells says Arizonan could see cost jumps on certain items at the grocery store as a result of 25% tariffs put on products from Mexico and Canada, as threatened by President Trump.
"About 90% of the agricultural produce that we import comes from Mexico so it's not just avocados," said Wells. "It's other things, too. So we'll definitely see this in your produce areas. This will happen relatively quickly. You'll see an increase in some of those prices or you won't see the sales that you like to look for quite as much."
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The sting of higher costs may also be felt when car shopping.
What they're saying:
"Even if it's made in the United States," said Wells. "Take the Silverado pickup truck, it's made up in the U.S. but most of their engines are made in Canada and as a consequence, the price of a lot of vehicles made in the U.S. Are gonna go up by about $2,000."
If a vehicle is actually made in Mexico, and a number of vehicles are made in Mexico, the cost may go up something like $8,000."
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A 25% tariff on imports from Canada and Mexico, plus additional tariffs on China, could drive up prices on everything from gas and groceries to smartphones and cars.
Some Americans don't anticipate any effects on their wallet
We asked shoppers in Phoenix if they have any concerns about products becoming more expensive at the grocery store.
"That's not gonna happen. That's just something they're speculating about. That's not gonna happen and until we see it happening then you can say that but it's gonna do the absolute reverse," said one shopper.
Others are critiquing the speed at which the new administration plans to implement the tariffs.
"It seems like another thing that's being maybe hastily jumped into or implemented, along with many other things. I mean, is that ready to go into effect? I don't know. We've had so much thrown at us at this point it's hard not to feel kind of numb to it all," said another shopper.
Retaliatory tariffs?
Big picture view:
Wells is predicting there could be retaliatory tariffs brought on by other countries.
"Both Canada and Mexico rely heavily on exports to the United States so they are likely to retaliate," said Wells. "We're gonna see a lot of uncertainty and businesses generally don't like to see uncertainty in the economy."
As for higher gas prices, Wells says the Midwest will get hit harder than Arizona due to its heavier reliance on Canadian refineries.
Overall, he says these tariffs are estimated to increase the inflation rate by half a percent.