Donald Trump’s steel and aluminium tariffs have come into effect.

But what are they and what do they mean for the UK?

What are tariffs and why does Trump want to impose them?

Tariffs are taxes on goods imported into the US.

The US president wants to impose wide-ranging tariffs on nearest neighbours Mexico and Canada, which he says will help reduce illegal migration and the smuggling of the synthetic opioid fentanyl to the US.

However, most of the 25% duties imposed on the pair to date have been suspended until 2 April.

But two rounds of tariffs on China have been enacted – reflecting trade imbalances and Mr Trump’s battle against fentanyl.

So why is he now targeting steel and aluminium?

On Wednesday, a separate 25% tariff on all steel and aluminium imports to the US came into effect, affecting UK products worth hundreds of millions of pounds.

The steel and aluminium tariffs are designed to protect US manufacturing and bolster jobs by making foreign-made products less attractive.

The world’s largest economy relies on imports of steel and aluminium and Mr Trump wants to change that.

How have countries – including the UK – reacted?

The European Union has announced it will impose retaliatory tariffs on the US.

The European Commission said it will impose “countermeasures” affecting €26bn (£21.9bn) of US goods from 1 April after US tariffs on steel and aluminium came into force today.

The bloc’s tariffs will not only impact US steel and aluminium products, but also textiles, home appliances and agricultural goods.

Canada has announced 25% retaliatory tariffs on US goods worth C$29.8bn (£16bn) from tomorrow, its country’s finance minister has said.

The tariffs will include steel products worth C$12.6bn (£6.8bn) and aluminium products worth C$3bn (£1.6bn).

Computers, sports equipment and cast iron goods are also among the other products subject to the new retaliatory tariffs.

Announcing the tariffs, Canada’s foreign minister, Melanie Joly, added that Canada will raise the issues of tariffs with European allies to coordinate a response to put pressure on the US.

While UK industry sees it as a direct attack, the reality is that this country is not a major player any more because energy costs, in particular, mean that UK-produced steel is expensive.

Nevertheless, stainless steel and some high-end products from the UK are in high demand and account for the bulk of the £350m in annual exports to the US.

Sir Keir Starmer has said he is “disappointed” to see Mr Trump impose global tariffs on steel and aluminium, saying the UK will take a “pragmatic approach” and “all options are on the table”.

The business secretary Jonathan Reynolds said on Wednesday morning that while he was disappointed, there would be no immediate retaliation by the UK government as negotiations continue over a wider trade deal with the US.

Why will metal products become more expensive?

It stands to reason that if you slap additional costs on importers in the US, that cost will be passed on down the supply chain to the end user.

If the aluminium to make soft drinks cans costs 25% more, for example, then the hit will have to be felt somewhere.

It could mean that any US product involving steel or aluminium goes up in price, but hikes could be limited if companies decide to take some of the burden in their bottom lines.

Read more on tariffs:
It may be harder for the UK to trump metals tariffs this time round
‘Canadianos’ and cancelled Vegas trips: How Canadians are acting with defiance

What are the prospects for higher prices?

It depends on the extent to which costs are passed down through the supply chain as new tariff regimes and any reciprocal tariffs are deployed.

We do know that Mr Trump plans to fully roll out duties, on all goods, against Mexico and Canada from 2 April. But the White House did row back on a threat to double Canada’s tariff on its steel and aluminium – the biggest exporter – to 50%.

But Mr Trump is also widely expected to target almost all imports from the European Union from the beginning of April.

Is the UK facing further tariffs?

Mr Trump has not explicitly said that the UK is in his sights.

Data shows no great trade imbalances – the gap between what you import and export from a certain country – and UK figures show no trade deficit with the United States.

UK ministers have previously suggested this could be good news for avoiding new levies.

Why tariffs could cost you – even if Trump spares UK

Even if no tariffs are put on all UK exports to the US, consumers globally will still be impacted by the wider trade war, particularly in the US.

Economists believe that tariffs will raise costs in the US, sparking a wave of inflation that will keep interest rates higher for longer. The US central bank, the Federal Reserve, is mandated to act to bring inflation down.

More expensive borrowing and costlier goods and services could bring about an economic downturn in the US and have knock-on effects in the UK.

Forecasts from the National Institute of Economic and Social Research (NIESR) predict lower UK economic growth due to higher global interest rates.

It has estimated that UK GDP (a measure of everything produced in the economy) could be between 2.5% and 3% lower over five years and 0.7% lower this year.

The Centre for Inclusive Trade Policy thinktank said a 20% across-the-board tariff, impacting the UK, could lead to a £22bn reduction in the UK’s US exports, with the hardest-hit sectors including fishing and mining.

Sir Keir Starmer has said he is “disappointed” to see Donald Trump impose global tariffs on steel and aluminium.

In his first remarks since the American president imposed the levy, the prime minister said the UK will take a “pragmatic approach” as it seeks an economic trade deal with the US and “all options are on the table”.

Politics Live: EU to impose counter tariffs on €26bn of US goods

Sir Keir was responding to a question from Liberal Democrat leader Sir Ed Davey, who called on the government to be more “robust” with Mr Trump.

The prime minister said: “Obviously, like everybody else, I’m disappointed to see global tariffs in relation to steel and aluminium.

“But we will take a pragmatic approach. We are, as he knows, negotiating an economic deal which covers and will include tariffs if we succeed. But we will keep all options on the table.”

Asked if he will fly out to Canada to stand with it “against Trump’s threats”, given it has borne the brunt of Mr Trump’s trade war, Sir Keir said the country is “an important ally” but did not commit to a visit.

The global tariffs came into effect at midnight in the US, around 4am UK time, imposing a flat duty on steel and aluminium entering America of 25%.

The move is designed to protect US manufacturing and bolster jobs by making foreign-made products less attractive.

It is a threat to UK steel exports – worth more than £350m annually, with the bulk of that coming from stainless steel.

The tariffs also risk making the cost of things from cars to soft drink cans, and therefore some drinks, more expensive.

Canada is the biggest exporter of both steel and aluminium to America. However, the White House on Tuesday rowed back on a threat to double the levy to 50%, after the provincial government of Ontario halted a plan to charge 25% more for electricity it supplies to over 1.5 million US homes and businesses.

Some countries have already retaliated, with the EU announcing €26bn-worth of counter tariffs on US goods, starting from 1 April.

However, Treasury minister James Murray warned earlier today against a “knee jerk” response.

He told Wilfred Frost on Sky News Breakfast : “We’re in a very different position than the EU, as a result of the prime minister’s trip to Washington last month.

“The UK and the US have been negotiating rapidly for an economic agreement, and so we’re in a position where that negotiation is ongoing and these global tariffs have landed in the middle of that work.”

Sir Keir was widely praised following a successful trip to Washington in February, during which Mr Trump said there was a “very good chance” of a trade deal with the UK that would not involve tariffs.

Money blog: World retaliates against Trump tariffs

It sparked hopes the UK could be exempt from future levies being planned by the US president.

Speaking to journalists after Prime Minister’s Questions, Sir Keir’s official spokesperson denied being snubbed, saying “obviously these are global tariffs, not targeted at the UK”.

Asked whether the economic deal planned between the US and UK would cover steel and aluminium, the spokesman said he was “not going to get ahead of those discussions”.

Business Secretary Jonathan Reynolds will discuss the deal in Washington DC next week, which the government has previously suggested will be focused mainly on technology co-operation.

Making “progress” on that deal will be the aim of those discussions, the PM’s spokesperson said, adding that the steel industry “has been clear” they don’t want to engage in an escalating trade war with the US.

The captain of the Solong – the container ship involved in the crash in the North Sea – is a Russian national, the vessel’s owners has said.

The rest of the crew were Russian and Filipino nationals, according to shipping company Ernst Russ.

It comes after police said a man had been arrested on suspicion of gross negligence manslaughter in connection with Monday’s collision.

Humberside Police said a 59-year-old is in custody to allow enquiries to take place, and officers are talking to those involved to find out what happened.

The force added investigators have started a criminal probe into the cause of the collision between the Stena Immaculate and Solong off the coast of East Yorkshire on Monday, and are working with the Maritime and Coastguard Agency.

One person remains missing and is presumed dead.

The tanker was operating as part of the US government’s tanker security programme, a group of commercial vessels that can be contracted to carry fuel for the military when needed.

Ship tracking software showed the Stena Immaculate was stationary as the Solong sailed towards and into it.

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