Trump’s Trade War Targets Your Groceries

As if grocery prices weren’t bad enough, they are about to get costlier — and it’s all due to tariffs.

President Donald Trump has been on and off with imposing 25% tariffs on goods imported from Mexico and Canada, though he's doubled the tax on Chinese imports. The added costs, which domestic companies pay, are expected to be transferred to consumers in some capacity — leading to price hikes on everyday goods, from your car to food and beverages.

The tariffs on our largest trading partners are separate from the 10% duty imposed on China a month ago. Together, the duties on all three countries will impact about a quarter of the total consumer spending in the U.S by 0.81% if businesses pass along half of the costs or 1.63% if costs are fully transferred, according to the Federal Reserve Bank of Atlanta.

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Mexico and Canada tariffs alone will contribute to about 45% of the total price effect, the study found. That’s not counting retaliatory measures, which are already upon us.

Here’s where you can expect prices to increase, starting with the food at your table.

Related: Check out Kiplinger's tax blog for the 2025 filing season. We're providing live updates, news, information, and commentary to help you navigate your taxes.

Mexico prepares countermove

Mexico President Claudia Sheinbaum announced Tuesday that the country would respond to 25% tariffs imposed by the U.S. with targeted retaliatory duties on U.S. goods. More information will be provided in the coming days.

• As reported by Kiplinger, Sheinbaum and Trump had reached a deal to pause 25% tariffs on Mexico imports to the U.S. on Feb. 3 for a month.
• Sheinbaum agreed to send 10,000 national guards to the border to prevent the flow of migrants and illicit drugs to the U.S.

Per the New York Times, Sheinbaum said that both countries had vowed to work together to not only address drugs moving north, but illegal guns entering Mexico.

On March 3, the Trump administration shared a statement addressing its move to lift the pause on Mexico and Canada’s tariffs on imports. Saying that both countries had failed to adequately address the fentanyl crisis.

The White House called Mexico drug trafficking organizations “the world’s leading fentanyl traffickers,” it also accused Canada of having “super labs” that produce the drug.

Sheinbaum told reporters that the White House statement regarding Mexico was “offensive, defamatory, and without substance.”

The impacts of tariffs, however, will be seen on your grocery list. Mexico is the largest supplier of fresh fruit and vegetables to the U.S. According to the latest government data, the United States is the destination of 91% of its annual horticultural exports.

To grasp the numbers: In 2023, Mexico supplied 63% of U.S. vegetable imports and 47% of fruit and nut imports, according to the U.S. Department of Agriculture (USDA).

Canada retaliates with tariffs on thousands of U.S. goods

Trump imposed 25% tariffs on imported goods from Canada on March 4, but limited the duty to 10% on Canadian energy.

As a countermeasure to Trump’s tariffs on Tuesday, Canada imposed 25% tariffs on $155 billion worth of U.S. goods. This will affect goods from meat and poultry, to milk products, nuts, oil, pasta, sugars, and chocolate — just to name a few.

Wines, certain beverages, and tobacco also make the list. So do soap detergents, pre-shave, and shampoo. Another big one is plywood, which is primarily used by U.S. homebuilders and imported primarily from Canada.

Outgoing Canadian Prime Minister Justin Trudeau responded with 25% tariffs on $30 billion worth of U.S. goods effective March 3, followed by the remaining $125 billion of products in the next 21 days.

“Our tariffs will remain in place until the U.S. trade action is withdrawn, and should U.S. tariffs not cease, we are in active and ongoing discussions with provinces and territories to pursue several non-tariff measures,” Trudeau said in a press statement.

Trudeau added that the United States’ tariffs were not justified and would violate the trade agreement negotiated by Trump during his first term. This refers to the U.S.-Mexico-Canada Agreement (USMCA).

Additionally, Canada’s prime minister said that Trump’s trade war meant to crack down on fentanyl trafficking was “completely bogus,” alleging the U.S. wants to collapse Canada’s economy in a bid to annex the country and make it the 51st state.

Separately, Ontario Premier Doug Ford told local reporters he is prepared to pull the plug on electricity exports to the United States. New York, Michigan, and Minnesota are Ontario’s largest customers.

“Your government has chosen to do this to you,” Trudeau said in an address to the American people in a press conference. “As of this morning, markets are down and inflation is set to rise dramatically all across the country. Your government has chosen to put American jobs at risk at the thousands of workplaces that succeed because of materials from Canada or because of consumers in Canada or both.”

“They have chosen to raise costs for American consumers on everyday essential items like groceries and gas. On major purchases like cars and homes, and everything in between,” added Trudeau.

China slaps counter tariffs on U.S. farmers

The Trump administration doubled the tariff on Chinese products to 20% on March 4, up from 10% a month ago.

Beijing retaliated with tariffs on up to 15% of U.S. agricultural and food exports. The duties will impact about $21 billion in U.S. goods exported to China.

China was the top destination for agricultural exports from the United States in 2023, followed by Mexico and Canada. The U.S. exported $33.7 billion worth of agricultural goods to China two years ago, according to the USDA.

The U.S. tends to export more non-manufactured goods such as rice, wheat, and oilseeds such as almonds.

‘Tariffs are really going to hurt our economy’

As an example of the ripple effect of Trump’s tariffs on the U.S. economy, even local producers will feel the impact.

Vermont, known for its maple syrup, is the leading producer of the good in the country. Some 54% of all maple in the U.S. comes from the state’s 8.4 million taps. That’s followed by New York, which produces 846,000 gallons and Maine, which offers just 701,000 gallons.

In 2024, Vermont produced 3.1 million gallons of maple syrup. But its success is not on its own.

Sugar makers are bracing for the fallout of Trump’s 25% tariffs on Canada, because most of the equipment needed to produce syrup is manufactured primarily from our northern trade ally. With new 25% tariffs, the tax could trickle down to higher prices for sugar at the grocery store for you.

“These tariffs are really going to hurt our economy in Vermont, and the impacts will be far-reaching,” said Senator Peter Welch (D-Vt) in a statement. “President Trump is singlehandedly raising costs for Vermonters—from the food on our table, to our energy bills, to the materials and equipment our home construction companies and manufacturers need.”

Welch is one of the co-sponsors of the Protecting Americans from Tax Hikes on Imported Goods Act, which aims to limit the authority of the International Emergency Economic Powers Act (IEEPA), which allows the President to enact immediate tariffs after declaring a state of national emergency.

What’s next

The United States is in the throes of a trade war, ignited by President Donald Trump. As China, Canada, and Mexico retaliate with counter tariffs or potential sanctions on the U.S., consumers can expect to feel some financial strain in upcoming weeks.

As reported by Kiplinger, tariffs on imported goods are taxes paid by domestic companies. These added costs are generally passed down to consumers, like you, so the company can still make a profit.

Economists warn that tariffs could make your shopping pricier from the cost of clothes and food, to suitcases and furniture.

Stay tuned to our coverage as we explore how the new tax can impact local businesses and producers, and consumers.

Related Content:

• Tariffs: What They Are and How They Impact Your Wallet
• Trump’s Tariffs Could Dramatically Spike Clothes, Toy Prices in 2025
• Trump’s Tariffs on Canada and Mexico to Spike Food, Gas Prices