Will Trump’s tariffs lead to higher taxes? Here’s how North Carolina could be affected
Editor’s note: This story was originally published on Thursday, March 6. Some information may now be outdated.
President Donald Trump’s tariffs on Canada, Mexico and China went into effect Tuesday, which means some products could come with higher price tags in the coming weeks.
There is now a 25% tariff (tax applied by governments on imported goods) on Mexico and most goods from Canada, and an additional 10% tariff on Chinese products, The News & Observer reported. A 10% tariff on Chinese goods has been in place since early February.
Canada and Mexico responded by implementing tariffs of their own, with Canada’s going into effect on Tuesday. Mexico is set to announce its tariffs on Sunday, March 9.
With tariffs in place, North Carolina residents can expect to pay more in taxes this year. Here’s how much your taxes could go up, which products will be affected and when the price hike will occur.
How much will taxes go up?
A study from the Tax Foundation, a nonprofit that educates the public on tax policy, found that tariffs imposed on Canada, Mexico and China will result in an average annual tax increase of $1,072 per household.
The study found that tariffs on Mexican products will add $435 in costs annually, while tariffs on Chinese and Canadian goods will add $329 and $309 in costs, respectively, each year.
Another study from the Peterson Institute for International Economics found that tariffs would lead to a tax increase of $1,200 per year for the average U.S. household.
Trump is working to extend tax cuts outlined in the 2017 Tax Cuts and Jobs Act that are set to expire in 2025, but most households will still see a net increase in their taxes, according to the institute.
“Only households in the top fifth of the income distribution would enjoy a net gain from the combined effects of the two tax changes; those in the bottom 60 percent of the income distribution would end up significantly worse off,” the institute says.
Taxes aside, local experts say some everyday items in North Carolina will get costlier too.
What will tariffs make more expensive?
North Carolina imports roughly $7 billion in products from China every year, which means the cost of products like cell phones, computers, toys and lithium batteries will likely increase, Mike Walden, a distinguished professor and extension economist at N.C. State University, previously told The N&O.
Products imported from Mexico, such as fruits and vegetables, could see price hikes, Walden said, adding that vehicle prices could also be more costly, since the country has emerged as a leading vehicle manufacturer.
President Trump imposing tariffs on Canada could result in higher lumber and gas prices for North Carolina residents, Walden said.
“We buy a heck of a lot of oil from Canada. It’s called heavy oil, and our refineries are geared to deal with that heavy oil,” Walden said. “That’s not something you can switch on and off easily.”
Price increases from tariffs depend on the product and how much cost the manufacturer passes onto the consumer, John Connaughton, an economics professor at UNC Charlotte, told The Charlotte Observer.
While you might see a slightly higher bill after pumping gas or getting your weekly groceries, Connaughton said, you would see a more noticeable price hike for larger purchases you wouldn’t buy every day, like appliances and cell phones.
When will price increases happen?
Opinions about when consumers may see price increases are varied.
Walden said price hikes could occur “very quickly,” likely within a week from when the tariffs go into effect. But Andrew Greenland, an assistant professor of economics at N.C. State, told the N&O prices could rise sooner, because anticipatory responses to tariffs have been documented.
This story was originally published March 6, 2025 at 9:33 AM.
