Cars and agricultural products aren't the only goods the Trump administration is targeting with tariffs. As part of the package of tariffs announced on March 5, the US slapped a 10% tariff on Canadian energy in addition to 25% tariffs on nearly all goods imported from Canada and Mexico.
At first, some businesses, like carmakers, were temporarily exempted, but that's no longer the case as of April 2. The Trump administration unveiled a list of tariffs for every country in the world, ranging from tariffs of 54% on China to 24% on Japan, 49% on Cambodia and 10% as a baseline for others.
The good news is there have been no additional tariffs on Canada and Mexico, though that doesn't mean American consumers won't feel an impact. On paper, the US imports only about 1% of its power needs, but the Northeast grid is significantly intertwined with the Canadian energy market. "Some American states might see energy costs rise rapidly, while others might experience a delayed effect over several weeks," said Javier Palomarez, CEO of the United States Hispanic Business Council.
Ontario Premier Doug Ford is preparing to tax electricity transmission to the US, which could also increase costs in the Northeast, where the price of power is already higher than the national average. The US is an importer of Canadian power, buying 2,700 gigawatts of power in 2024. New York received the most power in 2024, at 8.76 million megawatts.
This has the significant potential to drive up energy prices and other costs for American consumers in some regions, but some impacts may not be immediately apparent. To determine what may happen, we spoke with experts to assess the effect that US tariffs may have on you.
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"Since American companies pay the extra cost of importing goods, consumers may face higher prices for a plethora of goods and services, such as transportation, gas, electronics, lumber, metals, vehicles, produce, appliances and agriculture, just to name a few," Palomarez said.
Northeastern states and states heavily reliant on transportation and goods from taxed countries might feel more significant effects. The duration of the higher costs will depend on how companies absorb the costs and refocus their strategies to domestic production and consumers.
The impacts are likely to be spread out across a few key sectors.
Short-term impact on prices likely limited
The good news is that the impact of tariffs on consumers might not be immediate, according to two experts we spoke with.
"Markets (producers and consumers) have already adjusted for higher prices," said Jonathan Colehower, a supply chain expert at UST, a digital technology company that focuses on 5G, AI and retail consulting services. "The reality won't hit for another six months, just in time for holiday planning."
That means, assuming tariffs remain in effect, consumers can expect increased prices toward the end of the year.
With energy prices in particular, the increased costs in the wholesale market might not show up for a while in the rates charged to individual consumers.
The chaos and the back-and-forth on tariffs aren't likely to help keep prices low. As of April 2, reciprocal tariffs are currently in effect, resulting in tremendous volatility in the stock market and the global economy. Manufacturers may have priced some of these tariffs in, but it's unlikely they grasped the full scope of the situation.
Regions where the prices might be affected immediately are the Midwest and New England. According to Will Hares, a senior analyst of European oil and gas at Bloomberg Intelligence, the Midwest is reliant on Canadian crude, and New England is exposed to Canada's Irving oil refinery exports. Power is likely to be less affected, apart from Ontario's threat to cut off electricity exports to 1.5 million homes in New England.
Already, some states are reporting an increase in their energy bills within the last month, with Delaware seeing an average rise of $81, Mississippi seeing an increase of $78, Massachusetts seeing a jump of $75, Louisiana logging a $67 increase, and Missouri noting a $64 rise.
China may also be targeting Intel and the holding company that owns Calvin Klein and Illumina as part of its response to tariffs levied by the US.
Impact on oil
Tariffs could have mixed effects on oil in particular. According to Rob Thummel, senior portfolio manager at Tortoise Capital, Canada exports approximately 4 million barrels of oil per day to the US. It's also been the largest source of crude oil imports into the US since 2000 and Canadian crude oil is cheaper than US crude by as much as $20 per barrel.
"Canada and Mexico imports account for 25% of the oil we refine into gasoline and Canada alone accounts for nearly 20% of our natural gas supply," said Palomerez. "While long-term impacts are expected to settle at around a 2%-5% price increase, the issue could compound with existing market stressors. For example, the price of natural gas has already increased 111% in the past year. After the announcement of the tariffs, it's increasing at a rate of 14% a week."
However, this impact is likely to be disproportionate in certain regions. The Midwest is expected to be negatively affected. "Canada provides 4 million barrels per day of crude oil to the US, representing 60% of USA's oil imports," said Hares. "The US Midwest gets 100% of its oil from Canada and would likely be among the most exposed regions to price changes."
Other experts we spoke with didn't think the impact on oil itself would be as significant as the effects of the rest of the economy. "Tariffs could have a modest effect on oil prices from imports and exports themselves, but if tariffs stay in place, the inflation could cause a recession that would eventually reduce oil prices," said Jason DeLorenzo, principal and owner of Ad Deum Funds and the Volland trading platform.
Donald Trump has pledged to increase tariffs on all kinds of products and that could include solar panels. Higher tariffs will likely lead to higher prices for consumers.
Impact on renewables
The tariffs may significantly impact renewable energy. This means that going solar could become more expensive but it can also affect other industries.
"The Trump tariffs could significantly harm the electric vehicle, solar, battery and wind industries," said Palomarez. "Look at it this way: China supplies 75% of the world's lithium-ion batteries; Mexico supplies 40% of our imported steel; and Canada supplies half of the refined nickel America uses. These are all critical components of solar panels, wind turbines and batteries."
That also means that, combined with auto tariffs, electric vehicle adoption could get a lot more expensive.
However, Hares disagreed that the China tariffs will significantly impact renewable energy prices. "China is not a significant renewable equipment supplier for the US owing largely to pre-existing tariffs," said Hares. "China controls over 85% of the global solar supply chain and the US's pre-existing 50% China solar tariffs (now 70%) had already nearly eliminated US demand for China solar."
Essentially, US consumers are already paying higher prices for solar because of pre-existing tariffs. Less than 1% of direct solar imports came from China, with US companies opting to import from Southeast Asia, leading to higher-priced panels in the US compared with China.
A container ship unloads it's cargo from Asia at the Long Beach port. A new round of tariffs on consumer goods imported from China is set to take effect on Dec. 15 unless the US and China reach a deal on trade.
Impact on the economy
"Rapid implementation of extreme tariffs will in its very nature disrupt our economy, hitting small businesses and families the hardest," said Palmorez. This has long been the consensus of economists, with some crediting the Smoot-Hawley Tariff Act with reducing global trade and worsening the Great Depression.
"Tariffs are not great for the overall economy," said DeLorenzo. "At this time, businesses have to measure what is more important to them, profits or market share. If profits, they will pass these costs onto consumers. If market share, they will assume a lot of these costs."
What could make matters worse is if the US enters into a spiraling tariff war with its closest trading partners. "We have already seen initial stages of retaliatory tariffs from Canada on $30 billion of US products, with significant further escalation of $125 billion promised if US tariffs remain in place in the next 21 days," said Hares. China has also responded, while Mexico is holding off for now.
According to Brookings, the US, Mexico and Canada can all anticipate a major hit to their economies if tariffs remain in place. Expect increases in inflation, reduction in economic growth, job loss, falling wages and a contraction in exports among all parties.
Consumer sentiment will also take a hit. According to survey data collected by Payless Power, 81% of Gen Zers and 80% of millennials think the tariffs on imported energy products will drive up US electricity costs, with 71% of Gen Xers and 65% of Boomers in agreement.
Notably, a third of Americans are afraid tariffs will make it difficult to pay their energy bill, and 64% are concerned that rising electricity prices could affect other goods, like groceries, gas or rent. Interestingly, 83% of Gen Zers and 87% of millennials support reducing tariffs on imported solar panels and grid infrastructure to reduce electricity costs, though it remains to be seen if this sentiment translates into policy action.