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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4:36
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.
Image: 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.
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1:10
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 editorEd 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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0:50
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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0:59
Mexico responds to Trump’s tariffs
A spokesperson for theUK 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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0:31
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.
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.
Volodymyr Zelenskyy has told Donald Trump “let’s do a deal” as he offered the US a partnership over Ukraine’s stores of rare earth and minerals.
Earlier this week, Mr Trump said he wanted Ukraine to supply the US with critical resources in exchange for financial support in its war with Russia.
In an interview with Reuters on Friday, Mr Zelenskyy said: “If we are talking about a deal, then let’s do a deal, we are only for it.”
While emphasising that Kyiv was not proposing “giving away” its resources, he said he was open to a mutually beneficial partnership to develop them jointly.
Rare earths are a group of 17 metals that are vital in the production of high-performance magnets, electric motors and consumer electronics.
Mr Zelenskyy touted the country’s reserves of titanium and uranium as Europe’s largest.
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According to the World Economic Forum, Ukrainealso has the potential to become a key supplier of lithium, beryllium, manganese, gallium, zirconium, graphite, apatite, fluorite and nickel.
Showing a map of Ukraine’s mineral deposits, he then said Russiacurrently has control of less than 20% of the country’s mineral resources – but that includes about half its rare earth deposits.
Image: Zelenskyy said Ukraine has Europe’s largest stores of titanium and uranium. Pic: Reuters
“Putin is not just grabbing them [minerals] along with the land, he is already thinking about how to get other partners in his alliance – North Korea, Iran… and he will give them access,” Mr Zelenskyy said.
“This is very rich land. This does not mean that we are giving it away to anyone, even to strategic partners. We are talking about partnership…
“Let’s develop this together, make money, and most importantly, it’s about the security of the Western world.”
The Ukrainian president added that Kyiv and the White House were discussing the idea of using the country’s underground gas storage sites to store American liquefied natural gas, calling it “very interesting”.
He also said he would like to discuss the US having priority when it came to rebuilding Ukraine, saying it would amount to “a lot of money for business”.
‘Not accepting Russia’s ultimatums’
He also insisted that Mr Trump must meet with him before he meets with the Russian president, “otherwise it will look like a dialogue about Ukraine without Ukraine”.
He added: “I don’t know what compromises can be discussed at the negotiating table, we have not reached that point…
“It is important for people to understand that Ukraine is negotiating, not accepting ultimatums from Russia.”
He also stressed Ukraine’s need for security guarantees from its allies as part of any settlement.
It comes as Mr Trump said he may meet with Mr Zelenskyy in the White House as early as next week. The two last met in New York in September last year.
Mr Trump also repeated his interest in meeting the Russian president with whom he said he always had a “good relationship”.
Speaking to reporters while meeting with Japanese Prime Minister Shigeru Ishiba, Mr Trump said: “I’d like to see it end, just on a human basis. I’d like to see that end. It’s a ridiculous war.”
Mr Zelenskyy also told Reuters in his interview that thousands of North Korean soldiers have now returned to fight Kyiv’s forces in the Kursk region of Russia.
Hamas has released the names of three Israeli hostages it says it will release today in the fifth such swap of a fragile ceasefire in Gaza.
The hostages are Eli Sharabi, Ohad Ben Ami and Or Levy, Hamas armed wing spokesperson Abu Obeida said in a Telegram post.
An Israeli official confirmed Israel had received the three names from Hamas.
In return for the captives’ release, Hamas said it expects 183 Palestinian prisoners to be released.
Image: Jabalia, in northern Gaza, after months of Israeli attacks.
Pic: Reuters/Dawoud Abu Alkas
Both Mr Ami, 56, and Mr Sharabi, 52, were taken from Kibbutz Be’eri during the 7 October attack. The cross-border attack saw around 1,200 Israelis killed and around 250 people taken hostage.
Mr Levy, 34, was abducted from the Nova music festival.
Of the Palestinian prisoners being freed, 18 have been serving life sentences, 54 were serving long sentences and the vast majority, 111, were detained in Gaza during the war.
Eli Sharabi
Mr Sharabi’s wife Lianne Sharabi was born in Bristol.
She, along with their children, 16-year-old Noiya and 13-year-old Yahel, were killed in the 7 October attack.
His brother Yossi was also killed after being taken hostage.
In a statement after news he would be released was announced, Mr Sharabi’s lawyers said the “family has already lost too much… [they] are pleased and relieved that Eli Sharabi is reportedly on the list for release by Hamas”.
It added: “It is long past time to bring Eli home.”
Or Levy
Mr Levy was captured by militants from a bomb shelter near the Nova music festival.
His wife Einav was killed during the 7 October attack. Their son Almog, a toddler, is staying with his grandparents.
Mr Levy is from the city of Rishon Lezion, where he worked as a computer programmer.
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2:40
Michael Levy speaks to Sky News about his brother
Some of Mr Levy’s family previously spoke about his kidnapping and the death of his wife.
Speaking around Hanukkah last year, his brother Michael Levy told Sky News’s Yousra Elbagir: “I have three little girls but it won’t be the same. Hanukkah is a happy holiday – you light candles, you sing and eat all sorts of things but for us it is not a real holiday without Or.”
Ohad Ben Ami
Mr Ben Ami, a father of three, was taken hostage with his wife Raz, who was released during the brief ceasefire period in November.
His daughter Ella Ben Ami previously spoke to Sky News about missing her dad Mr Ami, as she pleaded for his release.
“On the eve of Christmas, on the 24 December, it will be his birthday, and I don’t want to celebrate it without him,” she told Sky News in 2023.
Ms Ami was previously one of the first to tell the world what happened on 7 October, calling an Israeli TV channel while hiding.
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1:11
Ella Ben Ami: ‘I miss my Dad and I need my Dad with me’ this Christmas Eve
Row over aid access
Earlier on Friday, Hamas accused Israel of breaching the ceasefire accord and held off announcing the names of the Israeli hostages until the deadline had passed.
The militant group claimed Israel delayed the entry of hundreds of trucks carrying food and other humanitarian supplies agreed under the truce deal and held back all but a fraction of the tents and mobile homes needed to provide people shelter in the devastated enclave.
“This demonstrates clear manipulation of relief and shelter priorities,” Hamas said in a statement.
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17:34
Trump 100 Day 17: Can Trump take over the Gaza Strip?
COGAT, the Israeli military agency that is overseeing the aid deliveries into Gaza, denied the accusation.
It added Israel would “not tolerate violations by Hamas”.
The claims and counter-claims highlight the fragility and uncertainty of the ceasefire.
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1:09
Gaza ceasefire deal explained
This has been heightened by US President Donald Trump recently saying the US could take over Gaza and move the Palestinian population out.
Israel’s air and ground war in Gaza has killed more than 47,000 Palestinians, according to Gaza health officials, and displaced the majority of the strip’s population.
Volodymyr Zelenskyy has told Donald Trump “let’s do a deal” as he offered the US a partnership over Ukraine’s stores of rare earth and minerals.
Earlier this week, Mr Trump said he wanted Ukraine to supply the US with critical resources in exchange for financial support in its war with Russia.
In an interview with Reuters on Friday, Mr Zelenskyy said: “If we are talking about a deal, then let’s do a deal, we are only for it.”
While emphasising that Kyiv was not proposing “giving away” its resources, he said he was open to a mutually beneficial partnership to develop them jointly.
Rare earths are a group of 17 metals that are vital in the production of high-performance magnets, electric motors and consumer electronics.
Mr Zelenskyy touted the country’s reserves of titanium and uranium as Europe’s largest.
More on Donald Trump
Related Topics:
According to the World Economic Forum, Ukrainealso has the potential to become a key supplier of lithium, beryllium, manganese, gallium, zirconium, graphite, apatite, fluorite and nickel.
Showing a map of Ukraine’s mineral deposits, he then said Russiacurrently has control of less than 20% of the country’s mineral resources – but that includes about half its rare earth deposits.
Image: Zelenskyy said Ukraine has Europe’s largest stores of titanium and uranium. Pic: Reuters
“Putin is not just grabbing them [minerals] along with the land, he is already thinking about how to get other partners in his alliance – North Korea, Iran… and he will give them access,” Mr Zelenskyy said.
“This is very rich land. This does not mean that we are giving it away to anyone, even to strategic partners. We are talking about partnership…
“Let’s develop this together, make money, and most importantly, it’s about the security of the Western world.”
The Ukrainian president added that Kyiv and the White House were discussing the idea of using the country’s underground gas storage sites to store American liquefied natural gas, calling it “very interesting”.
He also said he would like to discuss the US having priority when it came to rebuilding Ukraine, saying it would amount to “a lot of money for business”.
‘Not accepting Russia’s ultimatums’
He also insisted that Mr Trump must meet with him before he meets with the Russian president, “otherwise it will look like a dialogue about Ukraine without Ukraine”.
He added: “I don’t know what compromises can be discussed at the negotiating table, we have not reached that point…
“It is important for people to understand that Ukraine is negotiating, not accepting ultimatums from Russia.”
He also stressed Ukraine’s need for security guarantees from its allies as part of any settlement.
It comes as Mr Trump said he may meet with Mr Zelenskyy in the White House as early as next week. The two last met in New York in September last year.
Mr Trump also repeated his interest in meeting the Russian president with whom he said he always had a “good relationship”.
Speaking to reporters while meeting with Japanese Prime Minister Shigeru Ishiba, Mr Trump said: “I’d like to see it end, just on a human basis. I’d like to see that end. It’s a ridiculous war.”
Mr Zelenskyy also told Reuters in his interview that thousands of North Korean soldiers have now returned to fight Kyiv’s forces in the Kursk region of Russia.