How the US-Canada-Mexico tariffs will work—and what products are targeted

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Subscribe to enjoy similar stories. The Trump administration said Saturday it will levy 25% import tariffs on goods from Mexico and Canada, with Canadian energy products facing a 10% tariff. The announcement also includes an extra 10% tariff on imports from China.

The tariffs will take effect on Tuesday. Already, Canada has announced retaliatory tariffs, and Mexico has pledged to do the same. The machinery of tariffs is complicated.

How they will play out isn’t certain, largely because the White House appears to be partly using them as a negotiating tool. But here are answers to a few fundamental questions about how they work, and their immediate impact to American businesses and consumers: The firms importing the goods, many of which are American individuals and businesses, will pay for the tariffs. Who bears the ultimate burden of the tariffs however isn’t so straightforward.

An American importer can pass along the cost of tariffs to American businesses or consumers by raising its prices. Alternatively, a foreign exporter might ultimately shoulder the burden if it cuts prices to avoid losing sales. If the tariffs prompt U.S.

companies to turn to other countries for imports, those levies can be avoided, of course. Though in those instances, Canadian, Mexican and Chinese workers might lose jobs. Under that scenario, Americans would also likely pay higher prices, with more goods coming from alternative suppliers that face higher costs.

If production shifts to the U.S., Americans would likely pay higher prices as well, though some of that would likely go toward the wages and profits of other Americans. Prices of a host of items are likely to rise, from cars to gas, smartphones, and fresh vegetables. Since the U.S.