President Donald Trump on Thursday announced he will go ahead with tariffs on Canadian and Mexican imports and double tariffs on Chinese imports.
Trump said that the tariffs would go into effect Tuesday, with 25 percent levies on goods from Canada and Mexico, while the 10 percent tariffs on Chinese goods would rise to 20 percent. Canadian energy products would be subject to a 10 percent tariff. Canada and Mexico have vowed to retaliate with tariffs of their own.
He proposed those tariffs in early February before quickly delaying them for a month after receiving pledges from Canadian and Mexican leaders related to drug trafficking and immigration.
Now that pause appears to be ending, and with the prospective tariffs set to take effect next week, let’s look at how they may affect life here in Maine.
Canada is a major trading partner
Trump suggested earlier this month that Americans could feel “some pain” from his tariffs. Maine is poised to feel more of that pain than other states. About 70 percent of imports come from Canada, including virtually all heating oil, and 30 percent of the state’s exports are destined to the north.
Fuel prices
Mainers are likely to see the impact most directly at the gas pump and when they fill their home heating oil tanks.
Nearly all of Maine’s heating oil comes from Canada, and when Trump initially announced the tariffs, Irving Oil sent a notice to customers informing them that their bills would rise to offset the tariffs.
Unlike other parts of the country, New England has a much lower refinery capacity, meaning it relies more on Canada for refined products, while other regions source crude from Canada for processing domestically.
Patrick De Haan, head of petroleum analysis for GasBuddy, told the Bangor Daily News in early February that Mainers could see a 10- to 20-cent increase for a gallon of gas and a 20- to 30-cent increase per gallon of home heating oil.
Housing prices
Maine has been experiencing a major housing crunch, fueling rising home and rent prices and putting homeownership beyond the reach of many Mainers. That situation may worsen if Trump goes ahead with those tariffs.
CoreLogic, a data and analytics firm, projects that the Trump tariffs could increase the cost for building material 4 to 6 percent over the next 12 months, while the cost for fixtures could rise 10 to 20 percent. And that’s before factoring in inflation.
The average price for building a new home in the U.S. right now is about $422,000. The proposed tariffs could add between $17,000 and $22,000 to that bill, according to CoreLogic.
That could eat into profit margins — on average 11 percent for homebuilders, according to the National Association of Home Builders, which has warned Trump’s tariffs will drive up housing costs. Already, the association has found that the prospect for tariffs is dampening builder confidence.
Altogether, that could make it increasingly difficult for Maine to reach its ambitious goal to build 84,000 new homes before the end of the decade. The state will miss that goal if it can’t increase the housing stock beyond its current rate.
Beer prices
If you like a cold one after a hard day’s work or during a weekend out on the lake, that could get more expensive.
Trump also wants to go ahead with removing exemptions from the 25 percent aluminum and steel tariffs put in place during his first term back in 2018. And most of Maine’s aluminum comes from Canada.
Craft brewers may be able to absorb 2 to 3 percent of those tariffs, but the remainder may be passed onto consumers or eat into their profit margins, Alex Maffucci, owner of Atlantic Brewing Company and vice president of the Maine Brewers Guild, told the BDN in mid-February.
Unlike companies like Coca-Cola, beermakers can’t switch from cans to bottles to get around the tariffs.
Lobster processing
The lobster may be a Maine icon, but the state relies heavily on Canada for processing its lobster before it goes to the market in the U.S. and globally.
Between $200 million and $400 million of lobster has crossed the border between Maine and Canada annually since 2013, according to the World Institute for Strategic Economic Research.
Canada has a more robust lobster processing sector than the U.S., and trade barriers between the U.S. and Canada could harm Maine’s most valuable fishery — and communities up and down the coast. Fishermen hauled in $464 million of lobster in 2023, accounting for nearly 76 percent of the value of all Maine marine fisheries that year.
