In April, US President Donald Trump announced sweeping new tariffs that importing firms must pay to bring goods from abroad. Since then, some of America’s major trading partners – including the UK, Japan, and now the European Union — have negotiated down the headline tariff rates. The EU’s agreement has cut in half the 30 per cent tariff Trump had threatened.
Trump argues the extra tariffs will generate billions in revenue and push firms to manufacture within the US. “Many refineries need heavier crude oil to maximize flexibility of gasoline, diesel and jet fuel production,” according to the American Fuel and Petrochemical Manufacturers.
But there are early signs the levies are already pushing up prices for American consumers, and economists warn the full effects may still be ahead.
What’s getting more expensive?
Clothing and footwear
Most clothing and footwear sold in the US is made abroad, like in countries like Vietnam, China, and Bangladesh. Though Trump backed off from the steepest tariffs he initially proposed, taxes on imports from those countries remain sharply elevated. The US is now charging at least 30 per cent on goods from China, and plans to collect 19–20 per cent on imports from Vietnam, Bangladesh, and Indonesia.
Major retailers like Walmart and Target, as well as brands like Levi Strauss and Nike, are under pressure with some already warning of price hikes.
Cambodian garment workers buy clothes at Ang Tako village outside Phnom Penh Cambodia, Friday, August 1, 2025. (AP Photo/Heng Sinith)
After months of declines, apparel prices jumped 0.4 per cent from May to June. According to the Budget Lab at Yale, as quoted by BBC, clothing prices could rise 37 per cent in the short run.
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Food: coffee, olive oil, and more may get costlier
Nearly all the coffee consumed in the US is imported. Brazilian coffee faces 50 per cent tariffs, while Vietnamese coffee may be hit with a 20 per cent rate. The EU deal includes 15 per cent tariffs on products like olive oil from Italy, Spain, and Greece.
Meanwhile, Trump raised tariffs on Mexico, a major supplier of tomatoes and avocados. Though some products have been exempted, the Budget Lab at Yale estimates that food prices will rise 3.4 per cent in the short term, with fresh produce hit hardest.
Alcohol
European companies sell about €9 billion worth of alcohol to the US each year, including brands like Pernod Ricard and LVMH. Europe supplies a third of Irish whiskey exports and nearly 18 per cent of champagne exports. The European Commission hasn’t confirmed whether alcohol is included in the recent tariff agreement or exempted with other food items.
Meanwhile, tariffs on Mexican aluminum are expected to raise the cost of canned beer. About 64 per cent of US beer is served in cans, according to the Beer Institute.
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Cars
In March, Trump introduced a 25 per cent levy on imported passenger vehicles and parts, saying it would “protect America’s automobile industry.” That has since been lowered to 15 per cent for the EU and Japan, and 10 per cent for UK vehicles.
A worker checks on new cars parked in a lot at the International Car Operators terminal in the Port of Zeebrugge, Belgium, Thursday, July 31, 2025. (AP Photo/Virginia Mayo)
So far, car prices haven’t risen significantly. Erin Keating, executive analyst at Cox Automotive, says firms are “absorbing more of the burden [from tariffs] and not passing the added costs to consumers”. But that might not last. Many vehicles sold by US companies are assembled in Mexico or Canada, meaning they too are now subject to the levies.
Houses
Tariffs on steel and aluminum have already raised building costs. A 50 per cent copper tariff is now in effect, and lumber may be next. “Consumers end up paying for the tariffs in the form of higher home prices,” said the National Association of Home Builders, BBC reported.
A Canadian Chamber of Commerce report noted that the US gets 69 per cent of its lumber, 25 per cent of its imported iron and steel, and 18 per cent of copper from Canada, all now vulnerable to US tariffs.
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Energy and fuel
The US-EU deal will see Europe increase its imports of American LNG, oil, and nuclear fuels, which European Commission President Ursula von der Leyen said would help “replace Russian gas and oil”.
But US consumers may not benefit. While oil and gas imports are largely exempt from tariffs, Trump placed a 10 per cent levy on energy exports from Canada, America’s top foreign supplier of crude oil. Between January and November 2024, 61 per cent of US oil imports came from Canada.
The US doesn’t lack oil, but its refineries are built to process heavier crude, which mostly comes from Canada. If Canada retaliates by reducing exports, fuel prices could rise.
