Trump announced a 25% increase in tariffs effective February 1, 2025 between Canada, Mexico, and the USA.  This will be detrimental to the automotive industry and our food costs are going to increase.  In addition, we receive oil from Canada, so expect fuel costs to increase as well.

The proposed 25% increase in tariffs between Canada, Mexico, would likely have substantial effects on trade between these countries.

Immediate Effects

• Increased Costs: With higher tariffs, importing goods from Canada and Mexico would become more expensive for U.S. businesses and consumers.
• Reduced Demand: Higher prices due to tariffs could lead to reduced demand for Canadian and Mexican goods in the U.S. market.
• Industry Impact: The tariff increase will impact various industries, driving up costs for food and beverages such as cheese, milk, yogurt from Canada, meat from both countries, and fresh produce like tomatoes, avocados, fruit, and berries, as well as affecting automotive assembly and component parts, electronics (including TVs from Sony, Samsung, and LG), computers with devices assembled in Mexico, and home appliances.

Trade and Economic Implications

• Trade Volumes: The overall volume of trade between the affected countries could decrease as higher tariffs make trade more expensive.
• Supply Chain Disruptions: Companies relying on imports from Canada and Mexico might need to adjust their supply chains, potentially leading to delays and increased costs.
• Economic Impact: The increased costs and reduced trade volumes could have negative economic impacts, including potential job losses and decreased economic growth.
• Retaliation: Canada and Mexico might impose retaliatory tariffs on U.S. goods, leading to a broader trade conflict and further economic disruptions.

Potential Long-Term Consequences

• Investment Decisions: Higher tariffs could influence investment decisions, with companies potentially choosing to invest in countries with more favorable trade conditions.
• Innovation and Competitiveness: The increased costs and complexities associated with higher tariffs could impact the competitiveness of businesses in the affected countries, potentially slowing innovation.
• These outcomes would depend on various factors, including the specific products targeted by the tariffs, the duration of the tariffs, and the responses of the affected countries.

We are monitoring these media reports and will keep you posted.

Your Trusted Partner

At Red Arrow Logistics, our goal is to keep you informed and equipped with the latest industry trends, challenges, and opportunities. Whether you’re optimizing your supply chain, mitigating disruptions, or planning for future growth, we’re here to provide the expertise and solutions you need to succeed.

Red Arrow offers the scale and scope of services including air, ocean, and ground transportation to meet the budget and schedule requirements of the largest and smallest companies alike. If we can be of assistance, please email us at [email protected] or give us a call at 425-747-7914.