President Trump pauses tariffs on Mexico and Canada; economist breaks down impacts on your wallet

MILWAUKEE (CBS58) -- On Monday, President Donald Trump announced he would pause tariffs on Mexico and Canada for 30 days.

However, many people are still concerned that prices could go up if President Trump changes his mind.

If these tariffs are enacted, it could have a major impact on your grocery bill, car parts, or even lumber for your future home.

One economist said not to make any rash decisions just yet.

"What they're going to end up doing is passing the cost onto places like us. In this case, the cost of parts will go up," said Peter Bilgo, owner of Riverside Automotive

Peter Bilgo is the owner of Riverside Automotive on Milwaukee's east side. He says the only businesses benefiting from these tariffs are car repair shops.

"People are going to keep their cars longer. Used car prices even during Covid, the price of used cars was astronomical," said Bilgo.

However, it's not just parts for your car.

"There's over a billion dollars a day that automakers come into the country between Canada and the United States," said Bilgo.

According to Wolfe Research and TD Economics, experts estimate the average price of a new car will increase by three thousand dollars, but the price of other vehicles, like full-sized trucks, could increase by ten thousand dollars.

"There's a chance that prices will go up. It's not an inevitable prediction," said Avik Chakrabarti, Associate Professor of Economics at the University of Wisconsin Milwaukee.

Avik Chakrabarti is an Associate Professor of Economics at the University of Wisconsin Milwaukee.

He says not to hoard goods in fear of prices going up.

"Stacking up on essentials causes panic and raises prices," said Chakrabarti.

While Chakrabarti doesn't believe President Trump will enforce these tariffs after the 30-day pause, he says the Federal Reserve Bank will step in if he does.

"Interest rates have to be brought down to make sure that consumers don't suffer," said Chakrabarti.

Experts also say tariffs on lumber and other building materials may increase the cost of construction, discourage new development, and raise home prices.