New tariffs likely to raise grocery & car prices, Alaska economist says

ANCHORAGE, Alaska (KTUU) - With President Donald Trump telling members of Congress Tuesday new U.S. tariffs imposed on Mexico, Canada and China will mean “a little disturbance” — an Alaska economist used coffee as an example to say 49th state consumers should prepare to pay even higher than the Lower 48 because of Alaska’s historic difficulty importing items.

“There’s not a domestic coffee industry that’s going to replace imported coffee and allow us to avoid those tariffs. And so we will face higher prices for a lot of these things,” University of Alaska Anchorage’s Economics Department Chair Kevin Berry said.

To put numbers in perspective, a Joint Economic Committee report released this week by member Rep. Don Beyer, D-VA, citing Yale Budget Lab Data, said 25% tariffs could substantially raise the price of products depending on how much those prices are passed onto the consumer.

Fresh produce, for example, could increase by 3%, with overall food prices potentially rising by 2%, according to the report.

It’s a concern some lifelong Alaskans, like Glen Fuglestad are starting to worry about, saying he’s concerned that higher prices would be unbearable for everyone.

“We already pay a higher price for just about everything anyway, being here in Alaska, and I think it’s just going to compound the problem and I would hope our legislators would do something about that, but I haven’t seen him do anything yet,” Fuglestad said.

In an address to Congress Tuesday night, Trump repeated two different explanations for his tariffs on Canada and Mexico. He cited the trade deficits the U.S. has with both countries, but also said, “they’ve allowed fentanyl to come into our country at levels never seen before, killing hundreds of thousands of our citizens.”

Responding to the presidential address, Sen. Dan Sullivan, R-AK, told Alaska’s News Source he supported tariffs as a means to curbing the flow of fentanyl, which Sullivan says had meant Alaska maintained one of the highest fentanyl overdose rates in the country for the last two years.

“In terms of trying to force Mexico and, to a smaller degree, Canada on the fentanyl issue, I support that because that has been such a challenge,” Sullivan said.

But grocery prices are not the only product impacted.

Products such as automobiles, which are manufactured domestically but rely on other country’s imported parts, Kelley Blue Book has said could raise the average U.S. price of a new car, already nearly $49,000, by $3,000 or more, with some full-size pickup trucks rising by $10,000.

Though the President has granted a one-month exemption on the new tariffs for U.S. automakers, concerns remain that the trade war could have devastating consequences for domestic manufacturing.

Berry said that Alaska again would be especially in a challenging position, not only for imported vehicles, but the state’s general economy.

“If we’re talking about tariffs on things like aluminum and steel, those are materials that are used in our fishing industry as well as developing natural resources on the North Slope and elsewhere, as well. So a lot of the things that we import are necessary materials for making stuff and for economic activity that happens in Alaska,” he said.

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