The Trump administration is set to slap tariffs on products from Mexico, Canada, and China, which make up the three largest U.S. trading partners. The move could impact prices for everything from gasoline to avocados to iPhones.

President Donald Trump set March 4 as the start date for 25% tariffs on imports from Mexico and Canada, as well as an additional 10% tariff on Chinese goods.

Speaking at the White House on Monday afternoon, Trump confirmed that the tariffs would take effect the following day.

The announcement sent major stock indexes plummeting. The Dow Jones Industrial Average dropped 700 points, or about 1.5%; while the S&P 500 tumbled nearly 2%. The tech-heavy Nasdaq fell 2.5%.

The deadline arrives roughly one month after Trump granted Mexico and Canada a reprieve from such tariffs, having reached agreements with the two countries regarding border security and drug trafficking.

Here’s what to know about the tariffs set to take effect on Tuesday.

Tariffs could upend U.S. trade – unless they don’t happen

In recent days, Trump reaffirmed his commitment to placing tariffs on Canada and Mexico.

In multiple statements, Trump said he intends to move forward with the policy. On Thursday, Trump alleged that drugs had continued to enter the U.S. through Mexico and Canada despite agreements reached last month to address the issue.

“We cannot allow this scourge to continue to harm the USA, and therefore, until it stops, or is seriously limited, the proposed TARIFFS scheduled to go into effect on MARCH FOURTH will, indeed, go into effect, as scheduled,” Trump said in a post on Truth Social.

Trump voiced similar concerns about Mexico and Canada ahead of the previous tariff deadline before ultimately pausing the measures.

Commerce Secretary Howard Lutnick on Monday praised Mexico and Canada for their recent efforts to address border security, suggesting that the level of the tariffs remained uncertain.

“[Trump] is going to decide today – we’re going to put it out tomorrow,” Lutnick told CNN, describing the policymaking as a “fluid situation.”

On Monday afternoon, Trump confirmed that the the fresh round of tariffs would take effect the following day.

“That will start,” Trump said. “They’ll have to have tariffs.”

New tariffs could raise prices for some essentials

Tariffs on Mexico, Canada and China could raise prices for a vast array of goods, experts previously told ABC News.

Tariffs of this magnitude would likely increase prices paid by U.S. shoppers, since importers typically pass along a share of the cost of those higher taxes to consumers, experts said. The policy could hike prices for products ranging from tomatoes to tequila to auto parts.

Higher costs for car production could pose a challenge for U.S. automakers, many of which depend on a supply chain closely intertwined with Mexico and Canada.

“The automobile sector, in particular, is likely to see considerable negative consequences, not only because of the disruption of the supply chains that crisscross the three countries in the manufacturing process, but also because of the expected increase in the price of vehicles, which can dampen demand,” Gustavo Flores-Macias, a professor of government and public policy at Cornell University, told ABC News in a statement.

Mexico and Canada account for 70% of U.S. crude oil imports, which make up a key input for the nation’s gasoline supply, according to the U.S. Energy Information Administration, a government agency.

Trump previously said Canadian energy resources such as oil and gas would be subject to 10% tariffs, excluding the products from 25% tariffs faced by all other imports from the country.

The U.S. imported $38.5 billion in agricultural goods from Mexico in 2023, making it the top recipient of such products, U.S Department of Agriculture data showed. Those imports include more than $3 billion worth of fresh fruits and vegetables.

Roughly 90% of avocados eaten in the U.S. last year originated in Mexico, USDA data showed. Other products with a high concentration of Mexican imports include tomatoes, cucumbers, bell peppers, jalapenos, limes and mangos.

Targeted countries may retaliate

The fresh tariffs may trigger retaliation from Mexico, Canada and China.

In anticipation of tariffs last month, Canadian Prime Minister Justin Trudeau threatened retaliatory tariffs on $155 billion worth of goods and urged Canadians to choose Canada-made products over their American counterparts.

Mexican President Claudia Sheinbaum said she had instructed officials in her government to implement Plan B, “which includes tariff and non-tariff measures in defense of Mexico’s interests.”

Speaking to reporters on Monday, Sheinbaum said recent talks between the U.S. had gone “very well” but that Mexico retains options if necessary.

“We are going to wait and see what happens,” Sheinbaum said. “In that, you need to have mettle, serenity and patience, and we have Plan A, Plan B, Plan C, Plan D, so we are going to wait for today.”

ABC News’ Anne Flaherty contributed to this report.