Impact of the Trump tariffs already being felt in Minnesota

Impact of the Trump tariffs already being felt in Minnesota

Impact of the Trump tariffs already being felt in Minnesota

From gasoline to auto parts, even microbrews and toys.

Economist John Spry predicts with the new Trump tariffs, the price is going up.

“Roughly $100 a month more for the stuff you buy for as long as they’re in effect,” explains Spry, a finance professor at the University of St. Thomas. “These are big tariffs: 25% on everything from Canada and Mexico, except for a lower 10% on energy.”

First, gas prices.

GasBuddy is estimating prices could rise 20 cents a gallon or more, with that 10% tariff on it.

“When you buy gas or you buy things that are shipped by a truck using diesel, our refinery in Minnesota uses Canadian crude oil,” Spry explains. “That’s our number one import from Canada.”

The new tariffs will affect the price of cars and auto parts, he predicts.

“Parts are coming north from Mexico City, they’re coming in from British Columbia, and then if it’s assembled in Minnesota, you had to pay the tariff on those parts,” Spry notes.

Two-way trade between Minnesota and Canada, China and Mexico, is in the billions of dollars.

Canada is the largest, at $22 billion.

China is $9 billion, and Mexico is $7 billion.

Target is already warning about prices of fruits and vegetables from Mexico.

“We depend on Mexico during the winter,” Target CEO Brian Cornell explains. “We’re going to try to do everything we can to protect pricing, but if there’s a 25% tariff, those prices will go up.”

Best Buy CEO Corie Barrie, on an earnings call Tuesday morning, calls China and Mexico the number one and number two sources for products they sell.

We’ve never seen this kind of breadth of tariffs and this of course, impacts the whole industry,” she says. “At the end of the day, it’s the consumer, given how the tariffs are structured right now, who will have impacts across many of the things they are purchasing.”

Barry says she expects vendors will pass along tariff costs to retailers, making price increases for consumers ‘highly likely.’

Cornell says about half the goods the retail giant sells come from the U.S., with about 30% coming from China.

He says under these tariffs, consumers will likely see some price increases in the next couple of days.

Spry says there’s also a flip side if and when other nations enact retaliatory tariffs. “It’s harder to export to Canada now because they don’t want American-made products,” he explains. “The tariff is on American imports and that’s going to be a higher price at the grocery store, at the discount store.”