This article is from the source 'bbc' and was first published or seen on . The next check for changes will be

You can find the current article at its original source at https://www.bbc.com/news/articles/cn93e12rypgo

The article has changed 38 times. There is an RSS feed of changes available.

Version 1 Version 2
What are tariffs and will prices rise? What are tariffs and will prices rise?
(about 7 hours later)
Donald Trump imposed tariffs on goods from Mexico, Canada and China over the weekend. Watch: What is a tariff? The BBC's Adam Fleming explains
The US president said tariffs are needed to "protect" Americans from the "major threat of illegal aliens and deadly drugs", including fentanyl. Donald Trump announced plans to impose tariffs on goods from Mexico, Canada and China over the weekend.
Trump told the BBC that tariffs on EU goods could happen "pretty soon" - but suggested a deal "can be worked out" with the UK. The US president said tariffs were needed to "protect" Americans from the "major threat of illegal aliens and deadly drugs", including fentanyl.
Trump told the BBC tariffs on EU goods could happen "pretty soon" - but suggested a deal "can be worked out" with the UK.
He also floated the idea of an additional 10% across-the-board tariff on all goods imported into the US.He also floated the idea of an additional 10% across-the-board tariff on all goods imported into the US.
What are tariffs and how do they work?What are tariffs and how do they work?
Tariffs are taxes charged on goods imported from other countries.Tariffs are taxes charged on goods imported from other countries.
Trump is imposing a 25% tariff on goods shipped from Canada and Mexico. So, a product worth $4 will face an additional $1 charge applied to it. Trump said he would impose a 25% tariff on goods shipped from Canada and Mexico. So, a product worth $4 will face an additional $1 charge applied to it.
There will be a 10% charge on goods imported from China.There will be a 10% charge on goods imported from China.
Tariffs against China and Canada are expected to go into effect on 4 February at 00:01 am EDT (05:01 GMT). Tariffs against China and Canada are set to take effect on 4 February at 00:01 EDT (05:01 GMT).
Tariffs against Mexico will go into effect a month later. The proposed tariffs against Mexico have been delayed a month after the two countries struck a deal after a phone call between Trump and Mexican President Claudia Sheinbaum.
This type of tariff - charging a percentage of a product's value - is most common. Another type of tariff imposes a fixed figure on imports, whatever their value.This type of tariff - charging a percentage of a product's value - is most common. Another type of tariff imposes a fixed figure on imports, whatever their value.
Companies that import goods from abroad pay the tariffs to the US government. However, economists say these additional costs are usually passed on to the consumer through higher prices.Companies that import goods from abroad pay the tariffs to the US government. However, economists say these additional costs are usually passed on to the consumer through higher prices.
Why has Trump put tariffs on Canada, Mexico and China?Why has Trump put tariffs on Canada, Mexico and China?
The announcement is Trump fulfilling a campaign promise of introducing import duties against some of America's closest trading partners.The announcement is Trump fulfilling a campaign promise of introducing import duties against some of America's closest trading partners.
Trump said this will boost US manufacturing.Trump said this will boost US manufacturing.
The tariffs will grow the US economy, protect jobs, and raise tax revenue, he argues.The tariffs will grow the US economy, protect jobs, and raise tax revenue, he argues.
Trump says he is using tariffs not just for economic reasons, but also to "combat the scourge of fentanyl", a powerful drug that causes tens of thousands of overdose deaths in the US each year.Trump says he is using tariffs not just for economic reasons, but also to "combat the scourge of fentanyl", a powerful drug that causes tens of thousands of overdose deaths in the US each year.
His administration says chemicals used to make the drug come from China, while Mexican gangs supply it illegally and have fentanyl labs in Canada. Canadian Prime Minister Justin Trudeau has said less than 1% of fentanyl entering the US comes from his country.His administration says chemicals used to make the drug come from China, while Mexican gangs supply it illegally and have fentanyl labs in Canada. Canadian Prime Minister Justin Trudeau has said less than 1% of fentanyl entering the US comes from his country.
Six things that could get more expensive for Americans after Trump tariffsSix things that could get more expensive for Americans after Trump tariffs
Booze, oil and orange juice: How Canada could fight Trump tariffsBooze, oil and orange juice: How Canada could fight Trump tariffs
At the same time Trump is placing economic pressure on these trading partners, he has stated a desire for Canada to join America as the 51st state, an idea Trudeau has firmly rejected.At the same time Trump is placing economic pressure on these trading partners, he has stated a desire for Canada to join America as the 51st state, an idea Trudeau has firmly rejected.
In response to Trump's announcement, Trudeau declared retaliatory 25% tariffs on 155bn Canadian dollars' worth ($107bn; £86bn) of US goods on Saturday.In response to Trump's announcement, Trudeau declared retaliatory 25% tariffs on 155bn Canadian dollars' worth ($107bn; £86bn) of US goods on Saturday.
"Now is the time to choose products made right here in Canada," Trudeau wrote on social media. "Check the labels. Let's do our part. Wherever we can, choose Canada.""Now is the time to choose products made right here in Canada," Trudeau wrote on social media. "Check the labels. Let's do our part. Wherever we can, choose Canada."
Mexican President Claudia Sheinbaum has directed the Secretary of Economy to impose a plan including "tariff and non-tariff measures in defence of Mexico's interests".Mexican President Claudia Sheinbaum has directed the Secretary of Economy to impose a plan including "tariff and non-tariff measures in defence of Mexico's interests".
In a statement, China's foreign ministry said in a statement that it "firmly deplores and opposes this move" and will "take necessary countermeasures".In a statement, China's foreign ministry said in a statement that it "firmly deplores and opposes this move" and will "take necessary countermeasures".
"Trade and tariff wars have no winners," said a spokesperson at China's Washington embassy."Trade and tariff wars have no winners," said a spokesperson at China's Washington embassy.
Together, China, Mexico and Canada accounted for more than 40% of imports into the US last year.Together, China, Mexico and Canada accounted for more than 40% of imports into the US last year.
Which products will be affected?Which products will be affected?
In Trump's previous time in office, he applied less restrictive tariffs on China.In Trump's previous time in office, he applied less restrictive tariffs on China.
This time around, the tariffs appear to apply to most categories of goods.This time around, the tariffs appear to apply to most categories of goods.
There is, however, a carve-out for Canadian energy, which will be tariffed at 10% instead of 25%.There is, however, a carve-out for Canadian energy, which will be tariffed at 10% instead of 25%.
Goods from Mexico such as fruit, vegetables, spirits and beer are expected to get more expensive because of the tariffs.Goods from Mexico such as fruit, vegetables, spirits and beer are expected to get more expensive because of the tariffs.
Canadian goods such as steel, lumber, grains and potatoes are also likely to get pricier.Canadian goods such as steel, lumber, grains and potatoes are also likely to get pricier.
It is expected that the car manufacturing sector could see the brunt of the effects of the tariff.It is expected that the car manufacturing sector could see the brunt of the effects of the tariff.
Vehicle parts cross the US, Mexican and Canadian borders multiple times before a vehicle is completely assembled.Vehicle parts cross the US, Mexican and Canadian borders multiple times before a vehicle is completely assembled.
The average US car price could increase by $3,000 because of the import taxes, financial analyst TD economics suggested.The average US car price could increase by $3,000 because of the import taxes, financial analyst TD economics suggested.
Will the UK and Europe have to pay tariffs?Will the UK and Europe have to pay tariffs?
On Sunday, Trump said tariffs would also be imposed on the EU and the UK. On Sunday, Trump told the BBC the UK was acting "out of line", but suggested a solution for the UK could be "worked out" as he was "getting along very well" with UK Prime Minister Keir Starmer.
The president told the BBC both were acting "out of line", but because the EU was acting worse it could see tariffs "pretty soon". But, he said tariffs could be imposed on the EU "pretty soon", saying "they take almost nothing [from the US] and we take everything from them".
Trump suggested a solution for the UK could be "worked out" as he was "getting along very well" with UK Prime Minister Keir Starmer.
The UK's Business Secretary, Jonathan Reynolds, has said that he thinks the UK should be excluded from any tariffs because the US currently exports more products to the UK than it imports from the US.The UK's Business Secretary, Jonathan Reynolds, has said that he thinks the UK should be excluded from any tariffs because the US currently exports more products to the UK than it imports from the US.
"I think we've got an argument to engage with," Reynolds told the BBC."I think we've got an argument to engage with," Reynolds told the BBC.
The UK exports pharmaceutical products, cars and scientific instruments to the US.The UK exports pharmaceutical products, cars and scientific instruments to the US.
Last year, the US had a trade deficit of $213bn with the EU - which Trump described as "an atrocity".Last year, the US had a trade deficit of $213bn with the EU - which Trump described as "an atrocity".
The EU has said it would "respond firmly" to any tariffs.The EU has said it would "respond firmly" to any tariffs.
EU foreign policy chief Kaja Kallas said a trade war with the US would mean "the one laughing on the side is China", adding: "We need America, and America needs us as well."EU foreign policy chief Kaja Kallas said a trade war with the US would mean "the one laughing on the side is China", adding: "We need America, and America needs us as well."
US companies Harley Davidson, which manufactures motorcycles, and whiskey distilleries such as Jack Daniel's have previously faced tariffs from the EU.US companies Harley Davidson, which manufactures motorcycles, and whiskey distilleries such as Jack Daniel's have previously faced tariffs from the EU.
Do tariffs cause inflation?Do tariffs cause inflation?
Economists suggest that a portion of the cost of tariffs ends up being paid by consumers.Economists suggest that a portion of the cost of tariffs ends up being paid by consumers.
Sellers may raise the price of goods they are importing for consumers.Sellers may raise the price of goods they are importing for consumers.
Economic studies of the impacts of tariffs imposed by Trump during his first term in office show the burden was ultimately borne by US consumers.Economic studies of the impacts of tariffs imposed by Trump during his first term in office show the burden was ultimately borne by US consumers.
From 2018 to 2023, tariffs on imported washing machines saw the price of laundry equipment rise by 34% in the US, according to official statistics, before falling once the tariffs expired.From 2018 to 2023, tariffs on imported washing machines saw the price of laundry equipment rise by 34% in the US, according to official statistics, before falling once the tariffs expired.
Some experts suggest that these new tariffs could prompt a wider trade war and exacerbate inflation.Some experts suggest that these new tariffs could prompt a wider trade war and exacerbate inflation.
Capitol Economics said the annual rate of inflation could increase from 2.9% to as high as 4% because of the newly announced tariffs.Capitol Economics said the annual rate of inflation could increase from 2.9% to as high as 4% because of the newly announced tariffs.
If that happens, US inflation would return to the levels seen in mid-2023.If that happens, US inflation would return to the levels seen in mid-2023.