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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 1 hour 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 sweeping new tariffs on goods imported from the rest of the world.US President Donald Trump has announced sweeping new tariffs on goods imported from the rest of the world.
Trump claims that a 10% "baseline" tariff on all nations plus higher rates for individual countries will boost the US economy and protect jobs.Trump claims that a 10% "baseline" tariff on all nations plus higher rates for individual countries will boost the US economy and protect jobs.
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.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.
LIVE: Trump tariffs a 'major blow to world economy' says EU, as China vows retaliationLIVE: Trump tariffs a 'major blow to world economy' says EU, as China vows retaliation
What Trump has announced on tariffs and why it mattersWhat Trump has announced on tariffs and why it matters
How were Donald Trump's tariffs calculated?
What are tariffs and how do they work?What are tariffs and how do they work?
Tariffs are additional 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 (£7.59) product would mean an additional $2.50 (£1.90) 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, or may decide to import fewer foreign goods.Firms can choose to pass on some or all of the cost to customers, or may decide to import fewer foreign goods.
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, and has long been a critic of international free trade agreements.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 tariffs 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 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.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 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.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 introduced a 10% tariff on Chinese goods, which was later doubled to 20%.He introduced a 10% tariff on Chinese goods, which was later doubled to 20%.
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.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.
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.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.
Trump previously 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.Trump previously 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.
Trump's tariffs are expected to significantly disrupt US car production and put up pricesTrump's tariffs are expected to significantly disrupt US car production and put up prices
What are the 'reciprocal tariffs' Trump announced on 2 April?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.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.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.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%.Goods from the EU will be taxed at 20%.
The higher tariffs will start on 9 April.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.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.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 yearsFaisal Islam: This is the biggest change to global trade in 100 years
Trump's tariffs are a longtime goal fulfilled - and his biggest gamble yetTrump's tariffs are a longtime goal fulfilled - and his biggest gamble yet
BBC Verify: How were Donald Trump's tariffs calculated?BBC Verify: How were Donald Trump's tariffs calculated?
Will prices go up for US consumers?Will prices go up for US consumers?
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.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.
Some firms may also decide to import fewer foreign goods - or stop altogether - 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.
The price of goods manufactured in the US using imported components may also rise.The price of goods manufactured in the US using imported components may also rise.
For example, car parts typically cross the US, Mexican and Canadian borders multiple times before a vehicle is completely assembled.For example, car parts typically cross the US, Mexican and Canadian borders multiple times before a vehicle is completely assembled.
Car prices had already been expected to increase as a result of earlier tariffs.Car prices had already been expected to increase as a result of earlier tariffs.
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 (£3,035 - £7,588) 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, mainly machinery, cars and pharmaceuticals.The UK exported around £58bn of goods to the US in 2024, mainly machinery, cars and pharmaceuticals.
It was already due to be affected by the earlier tariffs targeting steel, aluminium and car imports.It was already due to be affected by the earlier tariffs targeting steel, aluminium and car imports.
The industry group Make UK said there was "a great deal of concern and disappointment" among British manufacturers over the latest announcements.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.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."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".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 had previously insisted that the UK was 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 US 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: UK relief but not delight at Trump tariffsChris Mason: UK relief but not delight at Trump tariffs
Three ways Trump's tariffs might affect you and your moneyThree 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'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?
World leaders have criticised Trump's latest tariffs as a "major blow" to the global economy and global stockmarkets have fallen.World leaders have criticised Trump's latest tariffs as a "major blow" to the global economy and global stockmarkets have fallen.
EU chief Ursula von der Leyen warned that "the consequences will be dire for millions of people around the globe".EU chief Ursula von der Leyen warned that "the consequences will be dire for millions of people around the globe".
She said Europe was finalising its response package to the steel and aluminium tariffs which had already been announced.She said Europe was finalising its response package to the steel and aluminium tariffs which had already been announced.
China has promised "resolute countermeasures" against the move.China has promised "resolute countermeasures" against the move.
Canada's Prime Minister Mark Carney said it was "essential to act with purpose and with force".Canada's Prime Minister Mark Carney said it was "essential to act with purpose and with force".
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".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".
In the Republic of Ireland, Micheál Martin said there was "no justification" for "deeply regrettable" tariffs which benefitted "no-one".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".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".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.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 tariffsPunitive or a gift? How five big economies see new Trump tariffs