What are tariffs and why is Trump using them?
In a growing trade war, US President Donald Trump has placed tariffs of up to 145% on Chinese goods. China has hit back with 125% on US products.
Trump has also introduced a 10% tax on goods from all other countries, while pausing much higher rates for dozens of nations for 90 days.
He argues that tariffs will boost US manufacturing and protect jobs, but the world economy has been thrown into chaos and prices are expected to rise for consumers.
What are tariffs and how do they work?
Tariffs are taxes charged on goods bought from other countries.
Typically, they are a percentage of a product's value.
The 10% tariff on goods from most nations means a $10 product would have a $1 tax on top - taking the total cost to $11.
The 145% charge on some Chinese goods would take the cost of a $10 product to $24.50.
Companies that bring foreign goods into the US have to pay the tax to the government.
They may pass some or all of the increased cost on to customers.
Why is Trump using tariffs?
Trump says tariffs will encourage US consumers to buy more American-made goods, increase the amount of tax raised and lead to huge levels of investment in the country.
He wants to reduce the gap between the value of goods the US buys from other countries and those it sells to them. He argues that America has been taken advantage of by "cheaters" and "pillaged" by foreigners.
The US president has made other demands alongside tariffs. The first announced during his current term targeted China, Mexico and Canada, after he said he wanted them to do more to stop migrants and illegal drugs reaching the US.
Trump has strongly defended his tariffs policy but influential voices within his Republican Party have joined opposition Democrats and foreign leaders in attacking the measures.
ReutersWhat has Trump announced on tariffs?
Since Trump's inauguration in January there has been a flurry of announcements on tariffs, with other countries scrambling to respond.
1 February: The president announces a 25% tax on Canadian and Mexican exports to the US - and an additional 10% on China
3 February: Mexico and Canada reach a deal to pause US tariffs for one month
10 February: Trump announces a 25% import tax on all steel and aluminium entering the US
4 March: The White House increases the tariff for Chinese imports to 20%
5 March: Trump temporarily exempts carmakers from the 25% tax imposed on Canada and Mexico
7 March: Trump expands the range of goods exempted from the Canada and Mexico tariffs
12 March: The 25% steel and aluminium tariffs take effect
26 March: The White House announces 25% duties on cars will apply from 2 April and on car parts at a later date but before 3 May
2 April: Trump says the US will impose "reciprocal tariffs" of up to 50% on certain countries and 10% on imports from all other countries, including the UK
5 April: The 10% tariffs take effect
9 April: Tariffs on roughly 60 countries - described by the US president as the "worst offenders" - are introduced. Trump later announces a 90-day pause, during which the 10% "baseline" rate will be paid, excluding China, for which an 125% tariff is applied
10 April: China's retaliatory 84% levy on US goods takes effect. The White House says tariffs on China would reach 145% for some products due to a previous 20% levy for those producing the drug fentanyl
11 April: China sets tariffs on US imports at 125% from 12 April. It says it will not respond to any further US tariffs, saying they will become a "joke"
There are a number of exemptions to the tariffs announced.
For example, goods in small parcels sent from China which are worth less than $800 (£624) are not included until 2 May. These will have a duty rate of 90% or $75 per item - increasing to $150 per item after 1 June.
The "baseline" 10% rate does not apply to Canada and Mexico. There have been a number of exemptions and delays since Trump announced they would face tariffs of 25% on most goods and 10% on Canadian energy.
How much trade is there between the US and China?
The US currently runs a trade deficit with China. In 2024, the US imported far more from China ($440bn) than Beijing imported from America ($145bn).
In his first term as president, Trump imposed significant tariffs on China, which were retained and expanded by his successor Joe Biden.
Together those trade barriers helped to reduce the amount the US bought from China from 21% of America's total imports in 2016 to 13% in 2024.
However, China still ships everything from iPhones to children's toys to the US. Analysts have pointed out that some Chinese goods enter the US via other south-east Asian countries, which could mean they can avoid the 125% rate.
Will prices go up for US consumers?
Many economists expect tariffs to push up prices across a range of imported goods, as firms pass on some or all of their increased costs.
The products affected could include everything from clothing to coffee and alcohol to electronics.
Some firms may also decide to import fewer foreign goods, which could make those which are available more expensive.
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.
Car prices had already been expected to increase as a result of earlier tariffs, which remain in place.
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.
What has happened to stock markets?
Trump's tariffs announcements have caused significant volatility on global stock markets.
Stock markets are where firms sell shares in their business. They reflect the best guess of what every company in the world is worth and what their future profits will be.
Many people are affected by stock market price falls - even if they don't invest in shares directly - because of the knock-on effect on pensions, jobs and interest rates.
How will Trump's tariffs affect the UK?
PA MediaThe UK exported around £58bn of goods to the US in 2024, mainly cars, machinery and pharmaceuticals.
It was already due to be affected by the earlier tariffs targeting steel, aluminium and car imports.
Prime Minister Sir Keir Starmer said "clearly there will be an economic impact" from the 10% tariff.
The UK is looking to negotiate a trade deal to soften the 10% tariffs, but one of the president's advisors suggests any such deal would have to be "extraordinary".
The UK government has so far not announced any taxes on US imports. However, it is drawing up a list of US products it could hit with retaliatory tariffs.
Following the announcement of tariffs, car maker Jaguar Land Rover said it would "pause" all shipments to the US as it worked to "address the new trading terms".
Economists have warned US tariffs could knock the UK's economy off course and make it harder for the government to hit its borrowing rules.
How have other countries responded to Trump's decision to pause the tariffs?
For countries on Donald Trump's so-called "worst offenders" list, there was a sigh of relief when tariffs were downgraded to 10%. But the impact of the lower rate remains a serious concern for them.
The European Union is among those seeking a trade deal with the US during this 90-day higher tariff pause. The bloc is also "developing retaliatory measures" in case talks fail, EU chief Ursula von der Leyen has said.
Poland's Prime Minister Donald Tusk urged all parties to "make the best" of the 90 day pause, stressing that maintaining strong relations with the US "is a common responsibility of Europeans and Americans"
Germany's incoming Chancellor Friedrich Merz said the pause proves a united European approach to trade has a positive effect, adding: "Europeans are determined to defend ourselves"
Vietnam's Deputy PM Ho Duc Phoc said that the US and Vietnam expect to start "negotiations on a bilateral trade agreement" which "would include tariff agreements"
Canada, which has been targeted by tariffs above 10%, introduced a 25% tariff on some vehicles from the US on 9 April.
