Businesses, consumers brace for possible effects of new tariffs on Mexico, Canada and China

RALEIGH, N.C. (WTVD) -- The White House announced on Friday that tariffs on goods from Mexico, Canada, and China will be implemented starting Saturday as the Trump administration follows through on campaign pledges.

The move, which the White House said was in response to concerns about illegal immigration and chemicals used to make fentanyl originating from those respective countries, could have a major effect across several sectors. Goods from Mexico and Canada will face a 25% tariff, and goods from China will have a 10% tariff; tariffs on oil and gas from Canada are not expected to be immediately implemented, and could be at a lower rate. It's not clear at this juncture whether any other products may ultimately be exempt.

"We're trying to do the best we can to keep the prices down for as long as we can. But the way this particular situation is being handled, it's not letting us plan. There are ways to handle things, and unfortunately, this creates too much uncertainty for small businesses where we're literally having to make sure we're checking in day to day and having to adapt quickly," said Jaime Sanchez, who co-owns Epilogue in Chapel Hill.

It opened in November 2019, just months before the COVID-19 pandemic.

"The idea was to have a space where people could come and feel like they were at home," said Sanchez.

While used to navigating supply chain limitations and price fluctuations, the possibility of tariffs presents a separate challenge.

"We're trying to keep stability for the customers, and we also have to think about our community that can't pivot to something more expensive," said Sanchez.

Sanchez highlighted their relationships with other local businesses while adding it does source some products from Mexico, both indirectly and directly.

"The core for our café, the chocolate, coffee, and we also import Talavera, which is Mexican pottery," said Sanchez.

Sanchez grew up in Mexico and said he believes the effects of the tariffs could be far-reaching on both sides of the border.

"It is sometimes forgotten that these tariffs aren't just being used as a weapon against another country or leverage. It's actually affecting people on the other side of the border, wherever that border may be. It is disheartening that an administration could use those tools without thinking of the long-term repercussions to individual people anywhere that are being affected. So it is a concern for family, friends, on that side of the border but also here. I care about my community, and my community goes across the border," Sanchez said.

Gerald Cohen, Chief Economist at the Kenan Institute of Private Enterprise at the UNC Kenan-Flagler Business School explained that small businesses are likely to feel greater challenges in sourcing products.

"If you're Walmart, you might have some avocado contingencies or melon contingencies. If you're a local mom-and-pop store, the chances of you having those contingencies is a lot lower," said Cohen.

The United States imported $38.5 billion in agricultural goods from Mexico in 2023, with produce and vegetables commonly purchased products.

"The likelihood that (price increases) gets passed through is extremely high," said Cohen.

Mexico and Canada alone account for 70% of U.S. crude oil imports, as tariffs could drive energy prices higher.

"We buy oil from Canada because it's most efficient for us to sell oil that's coming out of Alaska to Japan than it is ship it (elsewhere in) the United States. While we may produce more oil or as much oil as we're actually using, we may not be using American-made oil. We may be using Canadian-made oil and selling the American-made oil," Cohen explained.

In a statement, a spokesperson for Enbridge Gas North Carolina, which serves customers in the Triangle, told ABC 11:

Canada and the U.S. share a highly integrated energy system that supports economies and jobs on both sides of the border. Enbridge's energy infrastructure networks are critical to ensuring North American access to affordable, reliable energy. Energy flows across the border provide critical fuel and feedstock to both U.S. and Canadian economies.

The implementation of tariffs won't change the need for an abundant supply of energy, which is needed to support these priorities. That energy will continue to be needed and will continue to flow. Enbridge's system remains highly utilized.

What might change, however, is its cost dynamics - with potentially significant impacts for our customers and ultimately, for U.S. consumers. At this point, it's too early to know what those cost dynamics would look like.

We are prepared to work with governments on both sides of the border to discuss what we can do as North America's largest energy transportation company to ensure that both countries continue to have access to the affordable energy they need to maintain energy security and economic competitiveness.

"I think Americans who are concerned about increased prices should look at what President Trump did his first term. He effectively implemented tariffs, and the average inflation rate during the first administration was 1.9%," said White House Press Secretary Karoline Leavitt.

The Trump administration has contended the tariffs are part of a broader strategy, which will ultimately lead to lower prices.

"The media has this way of just looking at everything in a microscope rather than looking at the whole of government economic approach that this president is taking. He will effectively implement tariffs, he's also committed to tax cuts. He's also clearly committed, as evidenced by his Executive Orders, to unleashing the might of our energy industry which we know will eventually drive down inflation," said Leavitt.

Stocks fell in the immediate aftermath of the news, with the Dow Jones, S&P 500, and NASDAQ all finishing down to end the week.