The trade war is here. You’ll notice it at the grocery store first

Canadians’ pocketbooks will likely be the victim of a prolonged trade war with the U.S., with the prices on consumer goods potentially rising over the next weeks, some analysts say.

“We will see prices across the board going up,” said Andreas Schotter, a professor of business at Western University in London, Ont.

“I could imagine that on certain products you will see over the next few weeks, or even right now, an increase in prices.”

Food prices may be the first to take a hit because such items are perishable and can only be stored for a relatively short period of time, says Adelphe Ekponon, assistant professor of finance at the University of Ottawa.

Still, he said, eventually “everything will be impacted.”

Smaller selection of goods

U.S. President Donald Trump followed through on his long-threatened tariffs on Tuesday, imposed 25 per cent levies on Canadian and Mexican imports, and 10 per cent on Canadian energy. Trump also doubled the tariff he slapped last month on Chinese products to 20 per cent.

How is the Canada-U.S. trade war affecting your mental health? If you are comfortable sharing, we want to hear your story at ask@cbc.ca

In retaliation, Canada slapped 25 per cent tariffs on $30 billion worth of U.S. goods. Those tariffs will be applied to another $125 billion worth of imports after a three-week consultation period. 

Tu Nguyen, an economist at RSM Canada, said in a statement last month that, for Canadian households, a trade war “means an increase in prices of multiple consumer goods, including groceries, appliances and especially vehicles.” 

She added that Canadians should also expect a smaller selection of goods as the importing of U.S. products slows down.

Some of the goods being targeted by Canada include meat and dairy products, fruits and vegetables, plastic building materials, various clothing items, lumber and other wood products, and kitchen appliances.

Just how much such prices will increase is difficult to say and depends on how the costs are absorbed, which could include lowering production costs, reducing employment, or companies cutting their profit share, Ekponon says.

But the trade war could cause overall inflation to rise from between 0.5 to one per cent, “which is huge,” he said.

Along with prices rising in supermarkets, also expect increases in electronics, computers and other consumer products that either ship through or come from the U.S, Schotter says.

He…