Your Wallet at Risk: How US-Mexico Tariff Battle Could Raise Prices

President-elect Donald Trump's recent announcement of potential tariffs on Mexican and Canadian imports has triggered a sharp response from Mexican President Claudia Sheinbaum, signaling a potential economic standoff that could significantly impact American consumers and businesses. Secretaría de Cultura Ciudad de México from México / Gage Skidmore/ Wikimedia

Sheinbaum warned that Mexico would respond in kind to any tariffs, stating, "One tariff would be followed by another in response, and so on until we put at risk common businesses."

The proposed tariffs would target various industries, including automotive, agriculture, electronics, and manufacturing sectors. Secretaría de Cultura Ciudad de México from México / Wikimedia

Economists and business leaders are sounding the alarm about the potential consequences. Jonathan Gold from the National Retail Federation emphasized in a recent press release, "A tariff is a tax paid by the U.S. importer, not a foreign country or the exporter. This tax ultimately comes out of consumers' pockets through higher prices." National Retail Federation

Alice Vaughn, CEO of MilkToast Brands, told Newsweek, "The financial strain would force me to cut back on my team, limit new product development, and scale down operations. Customers, already feeling the pinch of inflation, would be hit with higher prices, which would drive down demand." @MilktoastBrands / X

Farmer Joe Maxwell provided a stark warning, telling Newsweek: "If the president [Trump], and I'm certain that he will, fulfills his commitment to increase tariffs up to 20 percent across the board, 60 percent on China, 200 percent on John Deere manufactured in Mexico, then we're going to pay more than just to put this in the consumers' stores." Rob Schumacher/The Republic / USA TODAY NETWORK via Imagn Images