Here's what's likely to get more expensive as trade war heats up

Here’s what tariffs will mean for consumers, and how they’re likely to impact the economy

What you probably already know: The trade war between the U.S. and its two border neighbors is heating up. Today we’ll dive into what to expect and what goods are likely to be most affected. CNN on Sunday was estimating the tariffs imposed by President Donald Trump on Friday — 25% on goods from Mexico and Canada, 10% on Chinese goods — will cost the average American family $2,600 this year. The stock market was primed for more losses after reversing gains made Friday before the tariffs were announced. The tariffs risk pushing both Mexico and Canada immediately into a recession, as both countries export about 80% of their goods to the U.S. The US Chamber of Commerce, a notoriously conservative organization, warned Saturday that the tariffs won’t solve the issues at the border and instead would just upend supply chains and drive up prices.

What’s going to happen? Mexico and Canada are not sitting idly by, either. Both countries are doing what some economists are calling “precision strikes,” targeting goods made in states that voted Republican in the last election. Canada has imposed tariffs on whiskeys from Kentucky, oranges from Florida and appliances made in South Carolina. The Canadian provinces of Ontario and British Columbia are moving to block the sale of U.S. wine and spirits. Mexico is planning to instate “carousel retaliation” where the country rotates which products are subject to tariffs in an effort to cause uncertainty in American markets.

What it means: Many U.S. car manufacturers build at least some of their cars or car parts in Mexico, so it is reasonable to expect the cost of vehicles to go up. Canada also exports significant amounts of lumber to the U.S., so building supplies will also be more expensive. The average consumer will feel it the worst at the grocery store. Items like cherry tomatoes, maple syrup, avocados, poultry and meat, and grains will be more expensive. The U.S. imported $3.1 billion worth of avocados this year and California simply won’t be able to keep up with demand, especially ahead of the Super Bowl when demand soars for guacamole. Prices for tequila and Canadian whiskey will also go up, along with beer from both countries.

What happens now? Trump has said the tariffs are to try to force these countries to do more to stem the tide of migrants and drugs crossing the border. Of course, with fewer migrants crossing the border — many of whom come in legally — farmers are already struggling to get the workers they need, which could drive up food prices even more than the tariffs. Additionally, farmers will struggle to get fertilizer, about 80% of which comes from Canada. The American Farm Bureau’s president on Sunday said “farmers and rural communities will bear the brunt of the retaliation.”