Tariffs on US Imports from Canada and Mexico will cost 1.9 million US jobs if Sustained

The Perryman Group Releases Estimates of Total Economic Costs, March 05, 2025

Tariffs of 25% on virtually all goods imported from Mexico and Canada with the exception of Canadian energy products (which are scheduled to be 10%) were recently announced. If levies of this magnitude are sustained for one year, The Perryman Group estimates that about 1.9 million US jobs could be lost.

According to Dr. Ray Perryman, President and CEO of The Perryman Group, “Free trade among North American nations has brought substantial benefits to all three nations for decades, and the ongoing trade war will cost American jobs and raise prices. Canada and Mexico are two of our most important trading partners, and imports are crucial to quality of life as well as the US industrial supply chain. We have stitched these economies together, and ripping them apart will have severe consequences.”

If the recent tariffs are maintained on both countries on an ongoing basis, estimated economic harms total $241.1 billion in annual gross product and more than 1.9 million jobs. In addition, tariffs would likely lead to inflation as additional costs are passed on to consumers. The Perryman Group’s analysis indicates that if both tariffs are implemented, the impact on overall inflation would be an increase of about 1.0 percentage point, with the effects on some of the most impacted products (including food, electronics, and automobiles) being much higher. In many instances, production moves back and forth across the border multiple times during the manufacturing process, thus amplifying the costs. The estimated effect on an average household would be costs of more than $1,500 per year when all inflation and supply chain effects are considered. Losses in Texas alone would be about $46 billion in annual gross product and about 370,000 jobs.

More information is available at www.perrymangroup.com, including a brief related to the impact of these tariffs.