President Donald Trump’s implementation of long-threatened tariffs has sparked an escalating trade war with China, Canada, and Mexico. The U.S. imposed 25% tariffs on imports from Canada and Mexico, as well as a heightened 20% levy on Chinese goods, prompting retaliatory measures from all three countries. This trade conflict is expected to impact consumers and businesses significantly, leading to higher costs for goods and potential price hikes across various sectors.

China, Canada, and Mexico have announced retaliatory measures, with China imposing tariffs on key U.S. farm exports and expanding export controls. Canada and Mexico have also unveiled plans for tariffs on American goods, affecting industries ranging from electronics to automotive.

Economists warn of real GDP losses and increased consumer prices across all economies involved in the tariffs. The U.S. economy may experience a 0.4% GDP loss due to combined tariffs. The uncertainty surrounding the trade war raises concerns about potential further tariffs on additional countries and products, injecting volatility into the global economy.

The impact on U.S. businesses is significant, with manufacturing companies and retailers facing challenges due to disrupted supply chains. Companies like Best Buy and Target anticipate pressure on profits, while the automotive industry braces for disruptions in cross-border supply chains.

Consumers are likely to feel the effects of tariffs through increased prices on everyday products, including electronics, clothing, and groceries. The complex global supply chain poses challenges for mitigating these price increases. The timing and extent of price hikes remain uncertain, with perishable items expected to be among the first to see cost impacts.

Overall, the trade war’s repercussions are far-reaching, affecting various sectors and economies, with ongoing uncertainty surrounding future developments.