New tariffs on imports from Canada and Mexico went into effect this week, signaling a shift in trade relations. The new tariffs will increase prices on a variety of goods in New Jersey. Under the U.S.-Mexico-Canada trade agreement, most goods moved tariff-free. Starting Tuesday, goods like passenger cars, electronics, and golf shoes will now face tariffs as high as 25%.
New Jersey residents will feel the impact quickly. U.S. importers will pay the tariffs and pass those costs to consumers. Prices for everyday items, especially in sectors like automotive, electronics, and footwear, will rise. Lower- and middle-income households will likely bear the brunt of these hikes.
President Trump has defended tariffs, saying they protect American manufacturing jobs and reduce the federal deficit. He claims foreign countries bear the cost. However, economists argue that U.S. consumers, not foreign countries, pay the price. Studies show tariffs often raise costs for businesses and consumers with limited benefits for job growth.
The administration sees tariffs as a way to strengthen U.S. industries. However, a recent study found that tariffs did not restore jobs to the steel industry, where job growth remained stagnant. The study also found retaliatory tariffs from foreign governments harmed U.S. businesses. For instance, U.S. farmers faced higher costs and lost export markets.
In New Jersey, industries reliant on trade will likely face disruptions. Retailers, manufacturers, and agricultural businesses will raise prices or deal with supply chain delays. These increased costs will be passed onto consumers. New Jersey’s economy, deeply tied to global trade, could feel ripple effects across multiple sectors.
The U.S. government collected around $80 billion in tariffs last fiscal year. However, this amount is small compared to the $2.5 trillion in income taxes and $1.7 trillion in Social Security and Medicare taxes. While tariffs may provide short-term revenue, they can provoke retaliation. For example, China imposed tariffs on U.S. goods like soybeans and pork. The European Union responded to Trump’s steel and aluminum tariffs by taxing American products like bourbon and motorcycles.
As the tariffs fully take effect, New Jersey residents can expect price hikes on a wide range of imported goods. The economic impact will take time to fully unfold, but consumers will likely feel the pinch as the cost of doing business and shopping rises.
The New Jersey Digest is a new jersey magazine that has chronicled daily life in the Garden State for over 10 years.