Donald Trump’s tariffs: What’s going on and what does it all mean?

Published

3 months ago

February 4, 2025

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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”.

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.

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.

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.

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.

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”.

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.

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Virginia Giuffre, who accused Prince Andrew of sexual assault, has died, her family says

Published

4 hours ago

April 26, 2025

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Virginia Giuffre, who accused Prince Andrew of sexual assault, has died, her family says

Virginia Giuffre, who accused Prince Andrew of sexual assault, has died aged 41.

In a statement to Sky’s US partner network NBC News on Friday, her family said she took her own life in Neergabby, Australia, where she had been living for several years.

“It is with utterly broken hearts that we announce that Virginia passed away last night at her farm in Western Australia,” her family said.

“She lost her life to suicide, after being a lifelong victim of sexual abuse and sex trafficking.

“Virginia was a fierce warrior in the fight against sexual abuse and sex trafficking. She was the light that lifted so many survivors.

“In the end, the toll of abuse is so heavy that it became unbearable for Virginia to handle its weight.”

Ms Giuffre sued the Duke of York for sexual abuse in August 2021, saying Andrew had sex with her when she was 17 and had been trafficked by his friend, the billionaire paedophile Jeffrey Epstein.

The duke has repeatedly denied the claims, and he has not been charged with any criminal offences.

In March 2022, it was announced Ms Giuffre and Andrew had reached an out-of-court settlement – believed to include a “substantial donation to Ms Giuffre’s charity in support of victims’ rights”.

‘An incredible champion’

Sigrid McCawley, Ms Giuffre’s attorney, told NBC News that she “was much more than a client to me; she was a dear friend and an incredible champion for other victims”.

“Her courage pushed me to fight harder, and her strength was awe-inspiring,” she said. “The world has lost an amazing human being today.”

“Rest in peace, my sweet angel,” she added.

Dini von Mueffling, Giuffre’s representative, also told the outlet: “Virginia was one of the most extraordinary human beings I have ever had the honour to know.

“Deeply loving, wise, and funny, she was a beacon to other survivors and victims. She adored her children and many animals.

“She was always more concerned with me than with herself. I will miss her beyond words. It was the privilege of a lifetime to represent her.”

Ms Giuffre said at the end of March she had four days to live after a car accident, posting on social media that “I’ve gone into kidney renal failure”. She was discharged from hospital eight days later.

Raised mainly in Florida, she said she was abused by a family friend early in life, which led to her living on the streets at times as a teenager.

She said that in 2000, she met Ghislaine Maxwell, a British socialite who was convicted in 2021 on federal sex trafficking and conspiracy charges and was sentenced to 20 years in prison.

Ms Giuffre said Maxwell then introduced her to Epstein and hired her as his masseuse, and said she was sex trafficked and sexually abused by him and associates around the world.

‘I am now a survivor’

After meeting her husband in 2002, while taking massage training in Thailand at what she said was Epstein’s behest, she moved to Australia and had a family.

She founded the sex trafficking victims’ advocacy charity SOAR in 2015, and is quoted on its website as saying: “I do this for victims everywhere.

“I am no longer the young and vulnerable girl who could be bullied. I am now a survivor, and nobody can ever take that away from me.”

:: Anyone feeling emotionally distressed or suicidal can call Samaritans for help on 116 123 or email jo@samaritans.org in the UK. In the US, call the Samaritans branch in your area or 1 (800) 273-TALK.

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Fighter jets, a naval destroyer and guns on show: The ‘unprecedented’ security operation for Pope’s funeral

Published

5 hours ago

April 26, 2025

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Fighter jets, a naval destroyer and guns on show: The 'unprecedented' security operation for Pope's funeral

As the line of mourners moves slowly along behind him, Ciriaco Sarnelli peers at me from beneath the immaculate brim of his cap.

The military police chief looks, by any standards, magnificent – shoulders back and proudly wearing the black uniform of the Carabinieri.

“Our history goes back more than 200 years,” he says. “We remember our past, and our place. The only people with black uniforms are the priests, the judges and the Carabinieri.”

He leaves the rest unsaid – the Carabinieri sit at the heart of Italian cultural life.

Pope latest: Security ramping up ahead of funeral

Once, they defended the borders of a young nation. Now, they have a new challenge that has its own weighty burden – to keep St Peter’s Square safe during the funeral of Pope Francis.

This is no easy task. Hundreds of thousands will descend upon the Vatican for the event.

Many of the world’s best-known politicians and dignitaries will be welcomed into St Peter’s Basilica.

Inside will be Donald Trump, Sir Keir Starmer, Joe Biden, Emmanuel Macron, Prince William and dozens upon dozens of other dignitaries.

Outside will be the Carabinieri.

They won’t be alone – there are thousands of other police officers due to be assigned to protect the event – but the Carabinieri are affiliated to the military; the most highly-trained officers on duty.

“This is an extraordinary operation,” says Sarnelli, as we look out over the crowd. “So we have employed some special units that belong to Carabinieri – the bomb squad, a dogs unit, snipers and helicopters. We want to assure the people who are arriving here that they can take part in this event in the best way, in a secure way.”

He says they are ready for “common crimes” – like pickpockets in the crowd – but also “the biggest, terrifying events”.

He says there is “excellent coordination” with police forces from other countries.

Around him, his officers are smiling, chatting to tourists and Romans alike.

The security here is overt but friendly, even if I’m told there are also plenty of plain-clothed officers mingling within the crowd.

Guns and grins both on show.

A police helicopter circles above. In the port of Rome, a naval destroyer has been primed for action; there are fighter jets ready to take off.

You can watch full coverage of the funeral live on Sky News on Saturday

If the impression is relaxed, the reality is different. The classic swan.

All the strands are pulled together from one place and, what’s more, it offers a perfect view of Vatican City.

From where I’m standing, I can see the front of St Peter’s Basilica, the side, and the roads around it. I can see the crowds coming in, and the crowds going out.

And I can see an anxious policeman drumming his fingers.

But we are not in St Peter’s and not even in the Vatican.

This is the high-security control room on the fifth floor of Rome’s police headquarters.

And from here, you can see everything.

An array of screens are in front of us and, watching them, men and women, huddled over screens and all wearing contrasting uniforms.

Some are military, some national police, some wear the clothes of firefighters. A few are in plain clothes and there is even a man wearing the badge of the prison officers’ service.

This centre is a hub for collaboration and decision-making and it brings together every service that is involved in ensuring the safety and security of the funeral.

There is a Carabinieri officer here, as well as the Guardia di Finanza national police and the Roman force. The government’s secret intelligence service is represented here, too.

Elisabetta Accardo is from Rome’s police department. We talk against the gentle hubbub in the control room, colleagues pointing at screens and agreeing plans.

I ask when Italy last had to deal with a security operation on this scale, and she laughs. “Hundreds of years,” she says.

“It is unprecedented. The level of security is at the maximum.” She describes the plan as “structured three-dimensional security”.

It is a plan that has been long in the making, but which has been reshaped over the past few days to react to the whims of the Pope’s final wishes.

It is, after all, more than a century since a pope was buried outside the walls of the Vatican.

You get the impression that the people designing the security plan could rather have done without having to add an hour-long procession through Rome into the plan.

But so be it.

By Saturday night, it will be done. Rome can start to get back to normal; the foreign leaders will be on their way home.

And the Rome police will breathe just a little bit easier.

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Kremlin blames Ukraine for car bomb killing of Russian general near Moscow – as Trump envoy meets Putin

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5 hours ago

April 26, 2025

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Kremlin blames Ukraine for car bomb killing of Russian general near Moscow - as Trump envoy meets Putin

The Kremlin has blamed Ukraine for a car bomb that killed a Russian general near Moscow hours before Donald Trump’s envoy was due to meet Vladimir Putin in the capital.

The death of Lieutenant General Yaroslav Moskalik is the second such fatal attack on a top Russian military officer in four months.

Russia’s top criminal investigation agency said he was killed by an explosive device placed in his car in Balashikha, just outside the capital.

Follow the latest updates on the Ukraine war

Moskalik was a deputy head of the main operational department in the General Staff of the Russian armed forces.

“The Kyiv regime once again simply shows its true nature. The Kyiv regime continues to be involved in terrorist activity on the territory of our country,” Kremlin spokesman Dmitry Peskov said.

He didn’t offer any evidence.

“It shows once again that, despite the peace talks, we must be on guard and understand the nature of this regime.”

Ukraine has not responded to the killing.

Investigative committee spokesperson Svetlana Petrenko said the explosive device was rigged with shrapnel, adding that investigators were at the scene.

Videos showed a vehicle burning in the courtyard of an apartment building and a body covered in a sheet could be seen on the pavement nearby.

Deadly attack is not a great look for the Kremlin

Explosions like this are happening with increasing frequency in Moscow. There have now been four since last summer, with high-ranking military figures the target each time.

The latest victim was another senior officer called Yaroslav Moskalik. He was a lieutenant general, and deputy head of the main operational department in the General Staff of Russia’s armed forces.

It’s unclear why he was targeted – it may simply be because of his seniority and apparent vulnerability.

As with previous the bombings, there is an obvious question: is it because of the war in Ukraine?

Kyiv hasn’t commented on this bombing, but they did claim responsibility for the one in December that killed a top Russian general.

Speaking to Sky News, Russian Foreign Ministry spokesperson Maria Zakharova called it a “terrorist attack”, echoing language Moscow has used when describing similar attacks in the past.

The timing feels significant – coinciding with Steve Witkoff’s visit to the Russian capital to meet Vladimir Putin.

If it was Ukraine, could it be a way of signalling their displeasure at the way peace talks are progressing? Or an attempt to demonstrate how Moscow can still be hurt?

Either way, it’s not a great look for the Kremlin.

It comes after Lieutenant General Igor Kirillov was killed in December when a bomb hidden on an electric scooter parked outside his apartment building exploded as he left for his office.

Russian authorities blamed Ukraine for the killing of Kirillov, and Ukraine’s security agency acknowledged that it was behind that attack.

Kirillov was the chief of Russia’s radiation, biological and chemical protection forces, the special troops tasked with protecting the military from the enemy’s use of nuclear, chemical or biological weapons and ensuring operations in a contaminated environment.

His assistant also died in the attack.

Talks bring Russia and US ‘closer together’

Friday’s bombing came as Mr Trump’s envoy Steve Witkoff met Mr Putin in Moscow to discuss a US-brokered peace plan for Ukraine.

The talks allowed Russia and the United States to “further bring their positions closer together” on “a number of international issues”, a Kremlin aide said.

The two sides discussed “the possibility of resuming direct negotiations between representatives of the Russian Federation and Ukraine”, Yuri Ushakov said.

The talks in Moscow lasted for three hours and were “constructive and useful”, he added.

Speaking on a flight to Italy for the Pope’s funeral, the US president said he hadn’t been fully briefed on Mr Witkoff and Mr Putin’s meeting – but added it was a “pretty good meeting”.

The meeting was their fourth encounter since February.

Russia and Ukraine have not held direct talks since the early weeks of the war, which began in February 2022.