New U.S. Tariffs Set to Raise Gas, Grocery, and Auto Prices Across North America

THUNDER BAY, ONTARIO – The Trump administration has announced plans to impose 25% tariffs on all Canadian and Mexican imports starting February 1, 2025. This move could have serious economic consequences for both countries while also significantly impacting the cost of living for American consumers.

The U.S. tariffs could result in higher fuel costs, more expensive groceries, and increased prices for vehicles and auto parts.

Impact on Gas Prices

The tariffs could lead to major hikes in gasoline prices, with some experts predicting an increase of 40 to 70 cents per litre in certain regions of the U.S.

Since Canada supplies 70% of U.S. crude oil imports, a tariff-induced slowdown in exports could disrupt the market and drive up gasoline and diesel fuel prices even further.

With spring and summer travel season approaching, these increases could strain household budgets and impact industries dependent on transportation, such as trucking and tourism.

Grocery Bills Set to Rise

Mexico is a major supplier of fresh fruits and vegetables to the U.S. with imports of key produce items such as:

• Avocados – 90% of those eaten in North America come from Mexico.
• Tomatoes, cucumbers, and peppers – Critical winter crops imported from Mexico.
• Limes and mangos – Other staple items that could see price hikes.

For  consumers, the tariffs could increase grocery costs, particularly during the winter months when much of the U.S. grown produce is limited. Food inflation, which has already been a concern in the United States may intensify if these tariffs take effect.

The Auto Industry Faces Disruptions

Canada and Mexico are the top two suppliers of motor vehicles and auto parts to the U.S., and the tariffs could significantly raise the cost of cars and repairs.

For consumers and businesses both which rely on vehicles for transporting goods, commuting and daily life, this could mean:

• Higher prices for new and used cars due to increased production costs.
• More expensive auto parts, affecting repair costs for everyday consumers.
• Potential disruptions in supply chains, leading to delays in vehicle availability.

With the automotive sector being deeply interconnected across North America, industry experts warn that these tariffs could slow down production, reduce jobs, and create long-term economic uncertainty.

What This Means for Thunder Bay and Northwestern Ontario

Thunder Bay’s economy is closely linked to trade with the U.S., particularly through industries such as forestry, manufacturing, and mining. The tariffs could lead to:

• Higher costs for exports from Ontario-based businesses that ship to the U.S.
• Increased prices for imports, raising costs for local retailers and consumers.
• Economic uncertainty, affecting investments and job security in key industries.

While the Trump administration defends the tariffs as part of an “America First” economic strategy, Canadian officials are expected to push back and negotiate exemptions to protect vital trade relationships.

Conclusions: What’s Next?

As February 1 approaches, businesses and consumers in Canada, Mexico and the United States should prepare for potential price increases in fuel, food, and vehicles. The Canadian government may seek trade relief or retaliatory measures, but in the short term, residents and businesses will likely feel the impact.

Federal, state, and provincial leaders and economic analysts will be closely watching how these tariffs unfold and whether they become a bargaining tool in U.S.-Canada trade negotiations.

For now, consumers should keep an eye on fuel prices, grocery bills, and auto costs—because February 1, 2025, could mark a significant shift in cross-border trade.