After weeks of White House hype and public anxiety, US President Donald Trump is set to announce a barrage of self-described "reciprocal" tariffs on friend and foe alike.
The new tariffs — coming on what Trump has called "Liberation Day" — is a bid to boost US manufacturing and punish other countries for what he has said are years of unfair trade practices.
But by most economists' assessments, the risky move threatens to plunge the economy into a downturn and mangle decades-old alliances.
Here is a breakdown of what and who will be impacted based on current data and economic insights.
What will be impacted?
Tariffs will affect trillions of dollars in imports from most US partners, imposing a 25 percent duty on cars, steel, aluminium, pharmaceuticals and more, excluding USMCA-covered goods.
Existing tariffs include a 25 percent rate on most Canadian and Mexican goods (10 percent on energy) and a 20 percent rate on Chinese imports, effective from March 4, 2025.
Prices for imported goods, including cars, electronics, lumber, pharmaceuticals, toys and footwear, are anticipated to increase. US importers pay these tariffs, and they often pass the costs to consumers.
A 25 percent auto tariff may raise US vehicle prices by $2,700. Tariffs on Canadian lumber and Mexican produce, like avocados, could increase housing and grocery costs.
US industries such as steel, aluminium and automotive may gain from less foreign competition, potentially boosting job growth.
The White House expects $100 billion in revenue from auto tariffs to bolster US manufacturing.
Industries dependent on imported components, like electronics and automotive, will face higher costs. US automakers importing from Canada and Mexico may experience disruptions despite USMCA exemptions.
The Tax Foundation estimates that Canada/Mexico/ China tariffs could reduce long-run GDP by 0.4 percent and result in 358,000 job losses due to increased costs and retaliatory export reductions.
Broader tariffs may exacerbate the situation, with models indicating a potential 1.3 percent GDP decline if a 20 percent universal tariff and a 60 percent China tariff are fully enacted.
The Federal Reserve has increased its 2025 inflation forecast from 2.5 percent to 2.7 percent due to tariff-induced price rises. Middle-income households may lose $1,700 to $3,900 in purchasing power annually.
Canada has imposed 25 percent tariffs on $155 billion of US goods. Mexico and China plan countermeasures. The EU may target US exports like soybeans and pork, risking millions of jobs in states like Texas and Ohio.
The North American supply chain, particularly in the automotive and energy sectors, is experiencing disruptions. Canadian oil, vital for Midwest refineries, may increase petrol prices by 10-20 cents per gallon, even with a reduced 10 percent tariff.
Who will be impacted?
Rising import prices will affect all income levels, but lower- and middle-class families, who spend more on essentials, will be hardest hit.
Residents in the Midwest and Mountain West, reliant on Canadian oil, and border states like Texas, dependent on Mexican trade, will experience significant impacts.
Companies such as Ford, Walmart and Apple may incur higher costs for imports. Some might absorb these, reducing profits, while others may pass them on, risking consumer backlash.
Farmers, like Iowa's corn and hog producers, and manufacturers, such as Ohio's auto parts makers, risk losing markets due to retaliatory tariffs, reminiscent of the $60 billion farm relief needed during Trump's first-term trade war.
Small American businesses lacking resources to adapt supply chains will face rising costs and uncertainty.
A 25 percent US tariff could reduce Mexico's GDP by up to 16 percent, given trade makes up 70 percent of its GDP, potentially causing recessions in both countries if extended. Ontario's auto industry faces a potential loss of 500,000 jobs.
A 20 percent tariff (with threats of 60 percent) may redirect its exports elsewhere, though a weakened yuan softens the blow.
China’s retaliation will hit US agriculture and LNG exports. Reciprocal tariffs on EU exports, such as cars and alcohol, could raise costs and risk retaliation, potentially escalating into a wider trade war.
Tariffs might generate $3.8 trillion from 2025-2034, offsetting Trump's tax cuts. However, dynamic effects and retaliation could reduce this to $3.1 trillion, according to Tax Foundation.
Trump's gamble that Americans will embrace higher costs for "Made in America" goods faces opposition from inflation-weary voters and businesses, potentially jeopardising his economic agenda.
Other implications
Tariffs on clean tech, like electric vehicles and wind turbine materials, could increase costs, slowing the US energy transition. Chip tariffs may also raise data centre costs, hindering AI progress.
Alienating allies such as Canada and the EU, while imposing 100 percent tariffs on BRICS nations, may weaken US economic influence by driving these countries closer together.
