Where Trump’s Tariffs on China, Mexico and Canada Would Hurt Most

On Feb. 4, President Donald Trump imposed 10% tariffs on China after reaching last-minute agreements with Canada and Mexico to delay 25% tariffs on them by 30 days. Trump’s tariffs on Chinese imports come as punishment for Beijing’s failure to rein in the smuggling of fentanyl precursor chemicals , while the stay on tariffs for Ottawa and Mexico City comes after both countries promised greater cooperation on combatting drug smuggling.

China has responded with 15% tariffs on U.S. coal, gas and other goods, as well as restrictions on some minerals exports and the launch of an antitrust investigation into Google.



Here are nine graphics that show the potential economic effects of such tariffs on all four countries. Nearly half of all U.S.

imports – more than $1.3 trillion – come from Canada, China and Mexico. However, analysis by Bloomberg Economics shows that the new tariffs could reduce overall U.

S. imports by 15%. While the Washington-based Tax Foundation estimates that the tariffs would generate around $100 billion per year in extra federal tax revenue, they could also impose significant costs on the broader economy: disrupting supply chains, raising costs for businesses, eliminating hundreds of thousands of jobs and ultimately driving up consumer prices.

Council on Foreign Relations Certain sectors of the U.S. economy will be hit particularly hard, including the automotive, energy and food sectors.

Gas prices could surge as much as 50 cents per gallon in the Midwest, as Canada and Mexico supply more than 70% of crude oil imports to U.S. refineries.

Also at risk are cars and other vehicles, as the United States imports nearly half its auto parts from its northern and southern neighbors. Council on Foreign Relations A 25% tariff on Canada and Mexico would raise production costs for U.S.

automakers, adding up to $3,000 to the price of some of the roughly 16 million cars sold in the United States each year. Grocery costs could rise, too, as Mexico is the United States’ biggest source of fresh produce, supplying more than 60% of U.S.

vegetable imports and nearly half of all fruit and nut imports. Council on Foreign Relations Still, the United States is less reliant on trade than many other industrialized economies, including Germany, Japan and the United Kingdom. Imports and exports make up just a quarter of U.

S. gross domestic product, and the United States sources what it does import from a fairly broad set of nations. Jorge Guajardo Jan.

28, 2025 Council on Foreign Relations Tariffs would hit Canada and Mexico much harder, as trade makes up about 70% of both economies’ GDP. Council on Foreign Relations The two countries are particularly dependent on trade with the United States. More than 80% of Mexico’s exports – including cars, machinery, fruits, vegetables and medical equipment – head north, accounting for 15% of total U.

S. imports. This dependence is especially pronounced on Mexico’s northern border.

There, industrial states Chihuahua, Coahuila, Nuevo León and Baja California account for nearly half of Mexico’s exports to the United States, sending more than $200 billion worth of computers, electronics, transportation equipment and other products each year. A unilateral 25% tariff on these goods could slash Mexico’s GDP by some 16%, according to Bloomberg Economics, with Mexico’s auto industry bearing the brunt. Mexico sends nearly 80% of the cars it produces to the United States alone, amounting to some 2.

5 million vehicles each year. Duties would also threaten Mexico’s energy sector; the United States is the recipient of roughly 60% of Mexico’s petroleum exports, most of which is crude oil bound for U.S.

refineries. At the same time, Mexico is the top destination for U.S.

refined oil exports, which meet over 70% of domestic demand. U.S.

tariffs would likely make fuel more expensive, raising prices at the pump and straining Mexico’s broader economy. Canada faces a similar challenge. The United States buys more than 70% of Canada’s exports, with these goods making up 14% of total U.

S. imports. If the tariffs were imposed, Canada’s energy sector would take the biggest hit, as exporters send 80% of their oil south.

These asymmetries in the cost of tariffs at home give the U.S. significant leverage over its North American partners in negotiations.

Miriam Sapiro Oct. 31, 2024 Council on Foreign Relations China is comparatively less dependent on the United States and less reliant on trade overall. Over the past two decades, the country has steadily reduced the importance of trade to its economy as it has ramped up domestic production.

Today, imports and exports account for only about 37% of China’s GDP, compared to more than 60% in the early 2000s. Council on Foreign Relations In recent years, U.S.

-China trade has declined , particularly in sectors hit by previous tariffs and export controls, such as auto parts, data servers, furniture and semiconductors. China has instead ramped up trade with other partners, including the European Union, Mexico and Vietnam. The country’s share of global trade has climbed roughly 4% since 2016, when Trump first took office, even as the United States’ share has dipped .

Combined, these factors would lessen the shock of an additional 10% tariff on Chinese exports to the United States. Each country’s currency could weaken further, lessening the bite of tariffs on imports and raising the effective price of U.S.

exports to other nations. A weakened yuan has already softened the blow for Chinese producers, helping their exports remain competitive around the world. The roughly 30% depreciation of Mexico’s peso since April and the Canadian dollar’s 8% drop since September also lessens the potential impact.

Markets could potentially drive the peso, as well as the Canadian dollar, further down if tariffs were in place. Additionally, Mexican President Claudia Sheinbaum has already suggested that Mexico could retaliate with tariffs of its own if Washington imposes tariffs, and the United States-Mexico-Canada Agreement, or USMCA, which underpins North American free trade, would likely allow it . This wouldn’t be the first time countries have reciprocated.

In 2018, Mexico and Canada placed retaliatory tariffs on more than $15 billion worth of U.S. goods – including steel, pork, yogurt and tablecloths – after Trump imposed tariffs on their steel and aluminum.

Likewise, the United States lost $20 billion in annual farm exports when China hit back against a slew of U.S. tariffs from 2018 to 2019.

Council on Foreign Relations If either Canada or Mexico retaliated, U.S. fuel exporters would likely take the biggest hit, alongside automakers and other advanced manufacturers, including pharmaceutical producers.

Council on Foreign Relations Retaliatory tariffs on the United States would predominantly affect manufacturing-heavy states. Mexico buys 70% of New Mexico’s exports, including billions of dollars in U.S.

semiconductor chips and electrical components that later return to the United States in Mexican-made cars and appliances. Texas sends more than $20 billion in chips, auto parts and electrical equipment to Mexico; overall, the state’s southbound exports account for 5% of its GDP. Tariffs would also dent Ohio’s $5 billion worth of auto and metal exports to Canada, as well as Maine’s $320 million in northbound lumber and paper exports.

Shannon K. O’Neill is senior vice president, director of studies and Maurice R. Greenberg chair at the Council on Foreign Relations.

Julia Huesa is a special assistant and research associate at CFR. Will Merrow created the graphics for this article. This commentary is published in partnership with CFR , an independent, nonpartisan membership organization, think tank and publisher dedicated to helping citizens better understand the world and foreign policy choices, and first appeared on CFR.

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