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 30 Version 31
What are tariffs, why is Trump using them, and will prices rise? What are tariffs, why is Trump using them, and will prices rise?
(about 5 hours later)
Watch: What is a tariff? The BBC's Adam Fleming explainsWatch: What is a tariff? The BBC's Adam Fleming explains
US President Donald Trump has announced a universal "baseline" 10% tariff on imports into the US, on what he has dubbed "Liberation Day". US President Donald Trump has announced sweeping new tariffs on goods imported from the rest of the world.
Describing 2 April, 2025 as "our declaration of America's economic independence", he said "reciprocal tariffs" would start at that baseline, although 60 countries would be hit with far higher rates of up to 50%. Trump claims that a 10% "baseline" tariff on all nations plus higher rates for individual countries will boost the US economy and protect jobs.
The tariffs will take effect in the next few days. However many economists warn that Trump's tariffs could lead to a global trade war, and that the increased costs will be passed on to American consumers, raising prices and threatening recession.
Trump said that from midnight on 3 April, the US would start imposing 25% tariffs on all foreign-made cars. It is unclear if this was additional to the universal tariffs. LIVE: Trump tariffs a 'major blow to world economy' says EU, as China vows retaliation
Trump argues the measures - which make foreign goods more expensive - will help US manufacturers and protect jobs. However, prices could go up for consumers.
What tariffs has Trump just announced?
Trump said that the US had been taken advantage of by "cheaters" and "pillaged" by foreigners and announced a 10% "baseline" tariff on all imports coming into the US.
However, nations including Cambodia, Vietnam, Malaysia and Bangladesh will be hit much harder, with tariffs reaching 50% in some cases.
UK goods will be hit by a 10% tariff, while those from the 27-member EU bloc by 20%.
The baseline 10% tariff will kick in on 5 April 12:01EST, while higher rates starting from 12:01 EST on 9 April.
Trump has previously announced a 25% tariff on all foreign-made cars coming into the US, which takes effect at midnight EST (04:00 GMT) 3 April.
Last month, he had unveiled a 25% tariff on all steel and aluminium imports.
The US president had also doubled to 20% a tariff on Chinese goods, slapped 25% on goods from Mexico and Canada, and a 10% tariff on Canadian energy imports.
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 additional taxes charged on goods imported from other countries.
Typically, tariffs are a percentage of a product's value. For example, a 25% tariff on a $10 (£7.76) product would mean an additional $2.50 charge. Typically, tariffs are a percentage of a product's value. For example, a 25% tariff on a $10 (£7.59) product would mean an additional $2.50 (£1.90) charge.
Companies that bring the foreign goods into the country have to pay the tax to the government.Companies that bring the foreign goods into the country have to pay the tax to the government.
Firms can choose to pass on some or all of the cost to customers. Firms can choose to pass on some or all of the cost to customers, or may decide to import fewer foreign goods.
The universal "reciprocal tariffs" announced by Trump are meant to target rival countries that are already placing import charges on American products - although the US president argues his levies are smaller than those imposed on the US.
LIVE: Starmer ruling "nothing out" on Trump tariffs as EU prepares "robust" response
Faisal Islam: Trump poised to reshape global economy and how world does business
Three big unknowns ahead of Trump's 'Liberation Day' tariffs
Analysts have warned the new tariffs will significantly disrupt US car production and put up prices for consumers
Why is Trump using tariffs?Why is Trump using tariffs?
Tariffs are a central part of Trump's economic vision. He says "tariff" is his favourite word. Tariffs are a central part of Trump's economic vision. He says "tariff" is his favourite word, and has long been a critic of international free trade agreements.
He argues the taxes will encourage US consumers to buy more American-made goods, boosting the country's economy and increasing the amount of tax raised. He argues tariffs will encourage US consumers to buy more American-made goods, boosting the country's economy and increasing the amount of tax raised.
Trump wants to reduce the gap between the value of goods the US imports and those it exports to other countries. Trump also wants to reduce the gap between the value of goods the US imports and those it exports to other countries, arguing that America has been taken advantage of by "cheaters" and "pillaged" by foreigners.
For example, the US had a trade deficit of $213bn (£165bn) with the European Union (EU) in 2024, something Trump has called "an atrocity". For example, the US had a trade deficit of $213bn (£165bn) with the European Union (EU) in 2024, something Trump has called "an atrocity".
The US president also said tariffs were intended to force China, Mexico and Canada - the countries first targeted - to do more to stop migrants and drugs reaching the US. The first tariffs Trump announced during his current presidential term targeted key US trading partners China, Mexico and Canada. He said he wanted them to do more to stop migrants and drugs reaching the US.
He has refused to rule out the possibility of a recession as a result of his trade policies. US Commerce Secretary Howard Lutnick said tariffs were "worth it" even if they led to an economic downturn. He introduced a 10% tariff on Chinese goods, which was later doubled to 20%.
Several tariffs announced by Trump have subsequently been delayed, amended or scrapped. He announced 25% tariffs on goods from Mexico and Canada, and a 10% tariff on Canadian energy imports, although these have since been delayed and amended.
Trump's tariffs risk economic turbulence - and voter backlash He has also introduced a 25% tariff on all steel and aluminium imports, and a 25% tariff on all foreign-made cars - with a 25% tariff on car parts due to come in at a later date.
Is the US really heading into a recession? Trump's tariffs are expected to significantly disrupt US car production and put up prices
The US firms backing Trump's fight over trade What are the 'reciprocal tariffs' Trump announced on 2 April?
Trump announced that a minimum 10% "baseline" tariff on all imports coming into the US would begin on 5 April.
This will affect a number of countries including the UK, Argentina, Australia, Brazil and Saudi Arabia.
However, several nations - described by Trump as "the worst offenders" - will face bigger tariffs, including 54% on goods from China (including the existing 20%), 49% on Cambodian products and 46% on Vietnamese imports.
Goods from the EU will be taxed at 20%.
The higher tariffs will start on 9 April.
He did not announce any new tariffs for Canada and Mexico. The White House said it would apply the tariff framework already announced.
It is not entirely clear how the new country-specific tariffs will interact with the steel, aluminium and car tariffs which are already in place.
Faisal Islam: This is the biggest change to global trade in 100 years
Trump's tariffs are a longtime goal fulfilled - and his biggest gamble yet
Global stocks slide as Trump tariffs hit markets
Will prices go up for US consumers?Will prices go up for US consumers?
Economists expect tariffs to increase prices for US consumers across many imported goods, as firms pass on some or all of their increased costs. There is a broad consensus among economists that the tariffs will push up prices for US consumers across a range of imported goods, as firms pass on some or all of their increased costs.
The products affected could include everything from beer, whisky and tequila to maple syrup, fuel and avocados.The products affected could include everything from beer, whisky and tequila to maple syrup, fuel and avocados.
Firms may also decide to import fewer foreign goods, which could in turn make those which are available more expensive. Some firms may also decide to import fewer foreign goods - or stop altogether - which could in turn make those which are available more expensive.
Among Trump's targets are overseas car firms. The US imported about eight million cars last year - accounting for about $240bn (£186bn) in trade and roughly half of overall sales. The price of goods manufactured in the US using imported components may also rise.
The new import taxes of 25% on cars and car parts will take effect on 2 April, with charges on businesses importing vehicles starting the next day. Taxes on parts are due to kick in later, possibly in May. For example, car parts typically cross the US, Mexican and Canadian borders multiple times before a vehicle is completely assembled.
Car prices were already expected to rise as a result of tariffs on imports from Canada and Mexico. Car prices had already been expected to increase as a result of earlier tariffs.
Component parts typically cross the US, Mexican and Canadian borders multiple times before a vehicle is completely assembled. The cost of a car made using parts from Mexico and Canada alone could rise by $4,000-$10,000 (£3,035 - £7,588) depending on the vehicle, according to analysts at the Anderson Economic Group.
The cost of a car made using parts from Mexico and Canada alone could rise by $4,000-$10,000 depending on the vehicle, according to analysts at the Anderson Economic Group.
The tariffs Trump announced during his first term as president raised the average price of steel and aluminium in the US by 2.4% and 1.6% respectively, according to the US International Trade Commission.The tariffs Trump announced during his first term as president raised the average price of steel and aluminium in the US by 2.4% and 1.6% respectively, according to the US International Trade Commission.
US tariffs on imported washing machines between 2018 and 2023 increased the price of laundry equipment by 34%, according to official statistics.US tariffs on imported washing machines between 2018 and 2023 increased the price of laundry equipment by 34%, according to official statistics.
Prices fell once the tariffs expired.Prices fell once the tariffs expired.
How will Trump's tariffs affect the UK?How will Trump's tariffs affect the UK?
The UK exported around £58bn of goods to the US in 2024. The UK exported around £58bn of goods to the US in 2024, mainly machinery, cars and pharmaceuticals.
The economy will be affected by the car and steel tariffs which have already been introduced - and is expected to be hit again by the latest measures. It was already due to be affected by the earlier tariffs targeting steel, aluminium and car imports.
Speaking at Prime Minister's Questions ahead of the Trump announcement, PM Sir Keir Starmer said he was "preparing for all eventualities", and ruling nothing out. The industry group Make UK said there was "a great deal of concern and disappointment" among British manufacturers over the latest announcements.
Prime Minister Sir Keir Starmer said "clearly there will be an economic impact" from the new 10% tariff, but promised to respond calmly.
"Nobody wins in a trade war, that is not in our national interest," he said.
He said US-UK trade talks are ongoing, and that he will "fight for the best deal for Britain".
The UK government has so far not announced any taxes on US imports.The UK government has so far not announced any taxes on US imports.
Trade Secretary Jonathan Reynolds has previously insisted that ongoing trade talks with the Trump administration mean the UK is in the "best possible position of any country" to have tariffs weakened or reversed. Trade Secretary Jonathan Reynolds had previously insisted that the UK was in the "best possible position of any country" to have tariffs weakened or reversed.
Economists have warned any major tariffs could knock the UK's economy off course and make it harder for the government to hit its self-imposed borrowing rules. Economists have warned US tariffs could knock the UK's economy off course and make it harder for the government to hit its self-imposed borrowing rules.
Chris Mason: Jitters, uncertainty and hope as UK awaits Trump tariff decision Chris Mason: UK relief but not delight at Trump tariffs
Three ways Trump's tariffs might affect you and your money
UK firms react to Trump tariffs: 'It's a huge blow to Scotland's whisky industry'
How have other countries responded to Trump's tariffs?How have other countries responded to Trump's tariffs?
A number of other countries have introduced their own tariffs on goods imported from the US. World leaders have criticised Trump's latest tariffs as a "major blow" to the global economy.
These will make US products more expensive, and are bolstering fears of a global trade war which could create problems for economies worldwide. EU chief Ursula von der Leyen warned that "the consequences will be dire for millions of people around the globe".
China has introduced a 10-15% tax on some US agricultural goods. It has also targeted US aviation, defence and tech firms. She said Europe was finalising its response package to the steel and aluminium tariffs which had already been announced.
EU tariffs targeting US goods worth €26bn (£22bn) will start on 1 April and be fully in place on 13 April. They will cover items ranging "from boats to bourbon to motorbikes", as well as steel and aluminium products. China has promised "resolute countermeasures" against the move.
The head of the European Commission, Ursula von der Leyen, has promised a "robust and calibrated response" to any further tariff announcements. Canada's Prime Minister Mark Carney said it was "essential to act with purpose and with force".
Canada has imposed 25% tariffs on US steel, aluminium and a range of other goods. Further counter tariffs may be introduced. Italy's Giorgia Meloni - a Trump ally - said the announcement was "wrong" but that she would work towards a deal with the US to "prevent a trade war".
Mexico has delayed introducing its own retaliatory tariffs while negotiations continue. In the Republic of Ireland, Micheál Martin said there was "no justification" for "deeply regrettable" tariffs which benefitted "no-one".
Australia's Anthony Albanese said "this is not the act of a friend".
South Korea's acting president Han Duck-Soo said "the global trade war has become a reality".
Japan said its 24% levy was "extremely regrettable" and could violate World Trade Organization and US-Japan agreements.
Punitive or a gift? How five big economies see new Trump tariffs