Donald Trump’s tariffs: What’s going on and what does it all mean?
Donald Trump has announced sweeping tariffs on Mexico, Canada and China, kicking off a trade war that will affect the globe.
Here we look at the tariffs and what they all mean for the world:
What did Trump announce?
On Sunday the US president said goods from Mexico and Canada will face 25% tariffs, while 10% taxes will be implemented on imports from China.
Canadian energy, including oil, natural gas and electricity, will be taxed at a 10% rate.
Trade war latest: Follow live updates
The levies were expected to all take effect on Tuesday, with Mexico and Canada both announcing counter-tariffs of their own in response.
However, on Monday both Mexican President Claudia Sheinbaum and Canadian Prime Minister Justin Trudeau said the implementation of tariffs would be paused for a month after they had calls with Mr Trump.
But Mr Trump has also threatened to go further, saying tariffs on the European Union would be implemented “pretty soon”.
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Trump’s proposed tariffs
When questioned about the UK, the president said Britain was “out of line” when it came to trade but he thought the situation could be “worked out” without the use of tariffs.
What are tariffs, and how do they work?
Put simply, tariffs are taxes on goods brought in from other countries.
By raising the price of imports, tariffs aim to protect domestic manufacturers by making locally made goods cheaper.
Contrary to what Mr Trump has said, it is not foreign countries that pay tariffs, but the importing companies that buy the goods.
For example, American businesses like Walmart or Target pay tariffs directly to the US treasury.
In the US, these tariffs are collected by customs and border protection agents, who are stationed at 328 ports of entry across the country.
Mr Trump’s proposed tariffs
To compensate for tariffs, companies then put up their prices, so customers end up paying more for goods.
Tariffs can also damage foreign countries as it makes their products pricier and harder to sell.
This can lead to them cutting prices (and sacrificing profits) to offset levies and maintain their market share in the US.
Why is Trump doing this?
Mr Trump has argued imposing higher levies will help reduce illegal migration and the smuggling of the synthetic opioid fentanyl to the US.
On Mexico, the US leader claimed drug traffickers and the country’s government “have an intolerable alliance” that in turn impacts national security.
He further claimed Mexican drug cartels are operating in Canada.
On China, he said the country’s government provides a “safe haven” for criminal organisations.
He has also pledged to use tariffs to boost domestic manufacturing.
“We may have short term some little pain, and people understand that. But long term, the United States has been ripped off by virtually every country in the world,” he said.
His aim appears to be to force governments in those countries to work much harder to prevent what he calls illegal migration and the smuggling of the deadly drug fentanyl – as appears to have been agreed by Mexico. But, even if the countries do not do what America wants, it will still potentially benefit firms that produce goods in the US.
What could the consequences be?
Mexico and Canada are two of America’s largest trading partners, with the tariffs upending decades-old trade relationships.
Goods that could be affected most by the incoming tariffs include fruit and veg, petrol and oil, cars and vehicle parts and electronic goods.
New analysis by the Budget Lab at Yale University found the average US household would lose the equivalent of $1,170 US dollars (£944) in income from the tariffs.
Read more: This is how US consumers will be affected
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Why Trump’s tariffs could cost you
The research also found economic growth would slow and inflation would worsen, as the tariffs forced up prices.
Immediate consequences were felt on Monday morning, as shares on Asian markets took a tumble.
Japan’s Nikkei opened down 2.9% while Australia’s benchmark – often a proxy trade for Chinese markets – fell 1.8%. Stocks in Hong Kong, which include listings of Chinese companies, fell 1.1%.
UK stocks were also significantly down, with the benchmark FTSE 100 index – containing the most valuable companies on the London Stock Exchange – dropped more than 1.3% on the open.
In Europe, stock markets opened sharply lower while the euro slid 1.3%. The Europe-wide index of companies, the Stoxx 600 dropped as much as 1.5%.
While Mexico’s peso hit its lowest in nearly three years.
‘Very scary path’
Sky News’ data and economics editor Ed Conway said the long-term consequences of a trade war is “everyone gets poorer”, which is what happened to the world before World War Two.
“As countries get poorer, they get frustrated and you get more nationalism,” Conway said, speaking on Friday’s Sky News Daily podcast.
“This is exactly what happened in the 1930s, and the world ended up at war with each other. It is a very, very scary path, and yes, we are basically on a potential of that path.”
However, Conway added one positive of Mr Trump’s tariffs could be highlighting “massive imbalances” within the global economy.
He said Mr Trump may be able to shift the conversation to problems “economists don’t want to talk about”.
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“At the moment, we have a dysfunctional global economy,” he explained.
“You have got massive imbalances like trade deficits [when a country’s imports exceeds the value of its exports] and trade surpluses [when a country’s exports exceeds the cost of its imports].
“There might well be a better way of everyone getting together and having a conversation and working out how to align their affairs, so we don’t have these imbalances in the future.
“And tariffs help to get you to this point.”
How has the world reacted?
Canadian Prime Minister Justin Trudeau reacted strongly against Mr Trump’s tariffs, saying his country would impose 25% tariffs on $155bn Canadian dollars (£85.9bn) of US goods in response.
He added the move would split the two countries apart, and urged Canadians to choose domestic products rather than American ones.
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Tariffs against Canada ‘will put US jobs at risk’
Mexican President Ms Sheinbaum posted on X on Sunday to say she had ordered her economy minister to implement tariff and non-tariff measures to defend Mexico’s interests.
She said her government “categorically rejects” the claim it has “alliances with criminal organisations” and called on the White House to “fight the sale of drugs on the streets of their major cities”.
A day later, she posted saying she and Mr Trump had a “good conversation” and “reached a series of agreements”.
These agreements include Mexico sending 10,000 troops to the border to “prevent drug trafficking from Mexico to the United States, particularly fentanyl”.
Mr Trump responded to the agreement with Ms Sheinbaum, saying negotiations between the two will be ongoing to try and achieve a “deal”.
Meanwhile, China has retaliated by imposing 10% tariffs on American crude oil, agricultural machinery, large-displacement cars and pickup trucks.
There will also be 15% tariffs on coal and liquefied natural gas, as well as an investigation into Google.
China also said it is imposing export controls on rare earth metals such as tungsten, tellurium, ruthenium, molybdenum and ruthenium-related items – the country controls much of the world’s supply of such metals, which are critical for the transition to clean energy.
They will not come into effect until Monday 10 February, however.
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Mexico responds to Trump’s tariffs
A spokesperson for the UK government reiterated that the US is an “indispensable ally” and one of the country’s “closest trading partners”.
They added that the trading relationship was “fair and balanced”, after Mr Trump criticised the UK, saying it was “out of line”.
European Union (EU) leaders have also taken a strong stance against looming US tariffs.
Kaja Kallas, the chief of foreign policy for the bloc, said there were no winners in a trade war, and if the US and Europe started one “then the one laughing on the side is China”.
German Chancellor Olaf Scholz added that the EU is strong enough to “respond to tariffs with our own tariffs”, while French President Emmanuel Macron said declarations by the US were pushing Europe to be “stronger and more united”.
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EU can react with its own tariffs
What’s the history of trade wars?
Imposing tariffs is not new to Mr Trump, or the US for that matter.
During his first term in the White House, he imposed higher levies on China and Vietnam.
In 2018, he imposed 25% tariffs on imported steel and 10% on imported aluminium from most countries, a response to what he said was the unfair impact of Chinese steel driving down prices and negatively affecting the US steel industry.
China then hit back with retaliatory tariffs on US imports, including 15% on 120 American products such as fruits, nuts, wine and steel pipes and a 25% tariff on US pork and recycled aluminium.
Before that, Democrat Jimmy Carter went so far as to completely ban the sale of wheat to Russia, which remained in effect until Ronald Reagan ended it in 1981.
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In 2019, Mr Trump also used the threat of tariffs as leverage to persuade Mexico to crack down on migrants crossing Mexican territory on their way to the US.
A study by economists at the Massachusetts Institute of Technology, the University of Zurich, Harvard and the World Bank concluded Mr Trump’s tariffs the first time around failed to restore jobs to the American heartland.
The tariffs “neither raised nor lowered US employment” when they were supposed to protect jobs, according to Sky News’ US partner network NBC News.
It is a moment few could have imagined just a few years ago but the Syrian president, Ahmed al Sharaa, has arrived in Washington for a landmark series of meetings, which will culminate in a face-to-face with Donald Trump at the White House.
His journey to this point is a remarkable story, and it’s a tale of how one man went from being a jihadist battlefield commander to a statesman on the global stage – now being welcomed by the world’s most powerful nation.
Mr Sharaa became leader of Syria after the fall of the Bashar al Assad regime in December last year.
Before that he went by the nom de guerre Abu Mohammed al Jolani.
During Syria’s brutal civil war, he was the leader of the Nusra Front – a designated terror organisation, the Syrian branch of al Qaeda.
Back then, the thought of him setting foot on US soil and meeting a US president would have been unthinkable. There was a $10m reward for information leading to his capture.
Ahmed al Sharaa meeting Donald Trump in Riyadh in May. Pic: AP
So what is going on? Why is diplomacy being turned on its head?
After 14 years of conflict which started during the so-called Arab Spring, Syria is in a mess.
Mr Sharaa – as the head of the transitional government – is seen by the US as having the greatest chance of holding the country together and stopping it from falling back into civil war and failed state territory.
But to do that, Syria has to emerge from its pariah status and that’s what the US is gambling on and why it’s inclined to offer its support and a warm embrace.
Donald Trump, Crown Prince Mohammed Bin Salman and Ahmed al Sharaa in May. Pic: Saudi Press Agency
By endorsing Mr Sharaa, it is hoping he will shed his past and emerge as a leader for everyone and unite the country.
Holding him close also means it’s less likely that Iran and Russia will again be able to gain a strong strategic foothold in the country.
So, a man who was once an enemy of the US is now being feted as a potential ally.
Mr Sharaa meeting Vladimir Putin in Moscow in October. Pic: Reuters
There are big questions, though. He has rejected his extremist background, saying he did what he did because of the circumstances of the civil war.
But since he took power, there have been sectarian clashes. In July, fighting broke out between Druze armed groups and Bedouin tribal fighters in Sweida.
It was a sign of just how fragile the country remains and also raises concerns about his ability to be a leader for everyone.
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Can Syria’s new president be trusted?
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Nonetheless, Mr Sharaa is viewed as the best chance of stabilising Syria and by extension an important part of the Middle East.
Get Syria right, the logic goes, and the rest of the jigsaw will be easier to put and hold together.
The visit to Washington is highly significant and historic. It’s the first-ever official visit by a Syrian head of state since the country’s independence in 1946.
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Top shot: Syrian leader shows off his basketball skills
The meeting with Donald Trump is, though, the really big deal. The two men met in Riyadh in May but in the meeting later today they will discuss lifting sanctions – crucial to Syria’s post-war reconstruction – how Syria can help in the fight against Islamic State, and a possible pathway to normalisation of relations with Israel.
The optics will be fascinating as the US continues to engage with a former militant with jihadi links.
It’s a risk, but if successful, it could reshape Syria’s role in the region from US enemy to strong regional ally.
World
Madagascar’s new president Michael Randrianirina denies coup after taking office following Gen Z uprising
A Gen Z uprising has pushed Madagascar’s former leader Andry Rajoelina, not only out of office but out of the country.
In his place is Colonel Michael Randrianirina, who was sworn in as president of the island nation last month after his military unit joined the protesters.
Sky News’ Africa correspondent Yousra Elbagir sits down with the new leader.
The first question I ask Colonel Randrianirina, as he sits in an ornate mahogany chair in his military fatigues, is how it feels to be in the palace as president.
He sighs and sinks deeper into the chair. He looks humbled and struggles to find the words.
“How do I put it?” he says. “I am happy and it is also a great honour to have come to this palace to be able to help and support the Malagasy people in deep poverty.”
As commander of an elite non-combatant military unit, Corps d’Administration des Personnels et des Services de l’Armée de Terre (CAPSAT), the colonel rode a wave of Gen Z protests to the palace. On 11 October, he shared a video on social media instructing officers to disobey shoot-to-kill orders and support the movement.
The new Madagascan leader, Colonel Michael Randrianirina
At least 22 protesters have been killed and more than 100 injured after denouncing the power cuts and water shortages that have come to signify government corruption in the impoverished island nation.
Why did he share the pivotal video?
He says: “I am a military officer but I am also part of the people and I will return to the people. When you feel sorry for what the people are suffering from… they have been poor for so long and wealth has been looted – but you still shoot them and kill them. That was not why I entered the military of Madagascar, to kill people.”
Soon after his speech, soldiers allowed the young protesters rejecting then president Andry Rajoelina to occupy Place du 13 Mai Square on Independence Avenue in the heart of Antananarivo, the island nation’s capital.
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October: Madagascar’s president flees country after coup
Colonel Randrianirina paraded through a crowd and addressed them from the hatch of an armoured vehicle. “The president of the nation has to leave… If that does not happen,” he threatened, “we will see”.
After Mr Rajoelina fled Madagascar on 13 October, the National Assembly voted to impeach him for “desertion of duty”. Three days later, Colonel Randrianirina stood in fatigues in front of the palace. With officers by his side, he announced their seizure of power and the dissolution of the constitution and all government institutions outside of the National Assembly.
Shortly after, the African Union suspended Madagascar‘s membership on account of the military takeover.
A demonstration in Antananarivo last month. Pic: Reuters
In the palace as president, he insists that this is not a military coup.
“It is support for the people and the country and for us to not be prone to civil war – between the people – between the military officers and your needs, so you adjust helping to support the people to avoid this.
“We were not conducting any coup at all, it was the president [Rajoelina] himself who decided to leave the country.”
Sky News meets Colonel Randrianirina
United Nations secretary-general Antonio Guterres condemned “the unconstitutional change of government in Madagascar” and called for “the return to constitutional order and the rule of law,” when reports of a military takeover first circulated on 16 October. The day we met the new president, he had just been congratulated by France’s President Emmanuel Macron.
Colonel Randrianirina is promising elections in 18 to 24 months, after what he calls a “refoundation and recovery” of the country – a process he admits might take a long time.
Observers are concerned that elections will be postponed and the new president will become another strongman, but Gen Z organisers are holding on to faith that this hard-earned outcome is worth it.
‘We were living under a dictatorship’
I asked a group of five young organisers if they have concerns that the president will become another dictator, just like previous Malagasy rulers who ascended to power off the back of a popular uprising. Ousted president Mr Rajoelina came into power after protests in 2009 that also ended in a CAPSAT-supported coup.
Police patrolling the streets during last month’s protests. Pic: AP
University student Ratsirarisoa Nomena told us: “The new president is not a dictator… he is listening to the people and he is validated by the people.
“We as students also validated him – he is not a dictator because the motivation of the army is from the people for the people.
“We were living under dictatorship. There was no freedom of expression and it was very hard to fight for that in Madagascar. We had to face being injured and losing our lives and the lives of our fellow students. Malagasy citizens who fought with us lost their lives too. This is what we went through – to me, we are halfway to victory.”
Their president is aware of their support and does not credit Gen Z alone for his place in the palace.
“Generation Z are part of the reason [I am here] but the full Malagasy people really wanted change at the time we are speaking,” Mr Randrianirina told me. “The Malagasy people have been suffering for so long and deprived of fundamental rights – no access to water supply and electricity, facing insecurity.
“Malagasy people, including the Gen Z, government officials and trade unions really wanted change so it is the whole Malagasy people that supported me to this point.”
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Across Africa, young people are showing their disapproval of the old guard.
Gen Z protesters have made their mark in Tanzania, Kenya, Cameroon, Morocco, Mozambique and Nigeria in 2025 alone – denouncing disputed elections and the corruption impacting their futures.
Is the Gen Z coup of Madagascar a warning for old leaders on a young continent?
“I don’t know what to say about the other countries, but I know my own country,” Mr Randrianirina says.
“If tomorrow the people of Madagascar hate me, then I will leave this palace.”
Two people have died and more than one million people evacuated after a storm bearing down on the Philippines intensified into a super typhoon and made landfall on Sunday.
Fung-wong started battering eastern and central parts of the country, causing power outages, and forcing President Ferdinand Marcos Jr to declare a state of emergency.
One person drowned in Catanduanes and firefighters recovered the body of a woman trapped under the debris of a collapsed home in Catbalogan City, officials said.
A satellite image shows Storm Fung-wong, which has intensified into a super typhoon. Pic: CSU/CIRA & JMA/JAXA/Handout via Reuters
A man walks in the rain with an umbrella as Typhoon Fung-wong approaches, in Cauayan, Isabela, Philippines. Pic: Reuters
Evacuations under way in Quezon province. Pic: Philippine Coast Guard via AP
An evacuation centre in Manila. Pic: Reuters
Packing sustained winds of 115mph and gusts of up to 140mph, Super Typhoon Fung-wong made landfall in Aurora province in central Luzon.
Those living in high-risk villages in northeastern provinces were told to evacuate, including in Bicol, a coastal region vulnerable to Pacific cyclones and mudflows from Mayon, one of the country’s most active volcanoes.
Defence secretary Gilberto Teodoro Jr warned Fung-wong could affect a vast expanse of the country, including the capital Manila, and Cebu, the central province hit hardest by the deadly Typhoon Kalmaegi just days ago.
More than 200 people were killed in the earlier typhoon, and around 100 are still missing.
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Filipinos stranded on roofs amid Typhoon floods
Mr Teodoro Jr urged residents to heed evacuation orders, warning refusing to comply was dangerous and unlawful.
“We ask people to pre-emptively evacuate so that we don’t end up having to conduct rescues at the last minute, which could put the lives of police, soldiers, firefighters and coast guard personnel at risk,” he said in a public address.
More than 30 million people could be exposed to hazards posed by Fung-wong, the Office of Civil Defence said.
The projection of the route that will be taken by Super Typhoon Fung-wong by Japan’s national weather agency. Pic: JMA
In Isabela in northern Luzon, dozens of families were sheltering at a basketball court repurposed as an evacuation centre.
“We’re scared,” said Christopher Sanchez, 50, who fled his home with his family. “We’re here with our grandchildren and our kids. The whole family is in the evacuation area.”
Nearly 400 domestic and international flights have been cancelled, according to the civil aviation regulator.
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Deadly tornado tears through southern Brazil
Deadly tornado in Brazil
Meanwhile, a powerful tornado ripped through the southern state of Parana in Brazil – killing at least six and injuring more than 750 people, state officials said on Saturday.
The tornado left a trail of destruction, downing trees, overturning vehicles and damaging buildings.
Roads were also blocked and power lines damaged, with authorities saying around 1,000 people were displaced,
“We will continue to assist the people of Parana and provide all the help needed,” President Luiz Inacio Lula da Silva wrote on X.
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