President Donald Trump announced Monday that his administration will implement 25% tariffs on all imports from Mexico and Canada starting Tuesday, in an effort to force the two countries to take a stronger stance in fighting narcotics trafficking and illegal immigration. Economic experts say that the tariffs will have devastating consequences for American consumers, including raising the price of goods, slowing the growth of U.S. gross domestic product (GDP), negatively impacting job growth, and causing stock market losses.

In a fact sheet explaining the decision, the Trump administration stated that they gave Canada and Mexico, two of the U.S.’s three largest trading partners, “ample opportunity to curb the dangerous cartel activity and influx of lethal drugs flowing into our country” but “have failed to adequately address the situation.”

In early February, Trump declared that he would pause implementing tariffs on Canada and Mexico for 30 days after the two countries took steps to address the president’s border concerns. Mexico ordered 10,000 National Guard troops to assist in fighting drug trafficking and illegal immigration, while Canada appointed a fentanyl czar. As reported by The New York Times on Sunday, Mexican cartel operatives admitted that they were fearful of arrest “for the first time in years” as a “barrage of arrests, drug seizures and lab busts by the Mexican authorities in recent months has struck the behemoth Sinaloa Cartel.”

Nonetheless, Trump went ahead with implementing the tariffs anyway on Tuesday, saying Monday that there is “no room left for Mexico or for Canada” to make a deal.

Canada responded swiftly Tuesday, announcing that they will levy a 25% tariff “on about $100 billion of U.S. imports” in response to the U.S. tariffs. Mexico also signaled that it would retaliate, saying that a number of measures would be announced on Sunday.

After promising to “drive down prices” on day one of his presidency, including delivering “low energy costs, low interest rates, low inflation, so that everyone can afford groceries, a car, and a home,” it appears that the tariff hikes will likely cause prices to rise, especially for automobiles. Due in part to the United States-Mexico-Canada Agreement (USMCA) that Trump himself negotiated in 2018, the vehicle market is greatly interconnected. As noted by The Wall Street Journal editorial board, Trump’s tariffs “will hit every cross-border transaction,” with “some cars cross[ing the] border as many as eight times as they’re assembled.” One analysis estimated that “the 25% tariff will raise the cost of a full-sized SUV assembled in North America by $9,000 and a pickup truck by $8,000.”

Ford Motor Company Chief Executive Jim Farley warned that if the 25% tariffs remain in place, it “would have a huge impact on our industry, with billions of dollars of industry profits wiped out.”

Other experts also predict that the tariffs will cause economic damage in an array of sectors. Dominic Pino, a fellow at the National Review Institute, wrote Monday that the tariffs will “be passed on to American consumers and businesses,” especially for energy costs since “Canada and Mexico are among the top buyers of U.S. petroleum products and sellers of U.S. crude oil imports.” It’s estimated that the tariffs will add 20-40 cents per gallon to the cost of gasoline and drive up natural gas prices by 5%. It is also estimated that the price of food and beverages will rise by 1.63% as a result.

Pino further predicted that the tariffs will slow down GDP growth by “harm[ing] productive industries by raising their input costs. The steel and aluminum tariffs, which are a separate measure, are a textbook growth-harming policy because they apply to products used to make other stuff, creating a ripple effect of cost increases.” He also projected that jobs will likely be lost, since the tariffs will cause businesses to have less money to pay workers because of the higher prices they have to pay for imported resources like steel, aluminum, oil, and copper, which “will probably [cause businesses to] cancel shifts, eliminate open job postings, cut bonuses, and lay off some workers.”

In announcing the tariffs, Trump argued that they would lead to an increase in manufacturing within the U.S. “So they’re going to have a tariff, and what they have to do is build their car plants, frankly, and other things, in the United States, in which case you have no tariffs,” he remarked.

But it remains unclear if this will occur. In a survey of manufacturers released last week, one observed, “Tariff threats and uncertainty are extremely disruptive.” Another commented, “This is a time of uncertainty for manufacturers, very difficult to make business plans.”