Will Donald Trump's tariff plan raise prices for gas, electronics and other needs?

President-elect Donald Trump has issued stark warnings to some U.S. trading partners, threatening to impose substantial tariffs on imported goods. Trump's aggressive stance has sparked backlash and fueled consumer anxiety over concerns that such tariffs would raise prices for everyday consumer goods nationwide.

The president-elect said he plans to impose new tariffs on Mexico, Canada and China as soon as he takes office. He announced plans Monday to impose a 25% tax on all products entering the United States from Canada and Mexico. It would add an additional 10% tariff on goods from China.

Trump claims that foreign countries pay tariffs, but it is American importers who cover these costs. The money goes to the U.S. Treasury, and these companies typically raise prices for customers to compensate for the higher expenses.

SEE ALSO: Dow closes at record high, defying fears of panic over Trump's tariff threat

Trump believes the tariffs will help the economy by forcing more products to be made in America, creating manufacturing jobs and increasing American innovation.

His goal is to force these countries to change policies that he believes are harmful to the United States.

“That's the hope. That's certainly the intention, but it doesn't always work out that way,” ABC News' Alexis Christoforous said Tuesday.

Christoforous examines the potential economic effects of Trump's proposed tariffs on Mexico, Canada and China.

“Canada’s largest export to the United States is crude oil,” Christoforous said. “About $160 billion in 2022 alone. This could have a huge impact on the Canadian economy. Canada says we want to continue talking with the new administration. The hope here, of course, is that it renegotiates the conditions so that the tariffs are never put in place.

SEE ALSO: Trump threatens to impose drastic new tariffs on Mexico, Canada and China on day one

However, U.S. consumers source their crude oil from various countries, including Saudi Arabia, Mexico, Iraq, and Brazil. The United States also has large stocks of crude oil, which will take some time to run out.

When current crude oil inventories decline over time, Americans can expect importers to pay higher prices. This increase could lead to higher costs for consumers for basic necessities, such as gasoline.

“If these tariffs are in place, then importers will have to pay a higher price,” Christoforous said. “They could then pass that cost on to consumers. We know that crude oil is an important component, about 60% of what gasoline is made of. So, over time, we may see gasoline prices rise. essence. “

Despite importing less from China than eight years ago, the United States continues to import hundreds of billions of electronic products from China each year, according to the U.S. Bureau of Industry and Security.

Many American manufacturers source parts for their products from China. Tariffs could cause Chinese importers to incur higher costs, which they will likely pass on to U.S. buyers. As a result, prices are expected to increase for American consumers.

“So these are imports not only from China but also from Mexico, where we get a lot of our auto parts,” Christoforous said. “These items, over time, will take some time, will progress slowly, but these prices could increase.”

Copyright 2024 ABC News Internet Ventures.

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