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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?

The US president said on Sunday that 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, Mexican President Claudia Sheinbaum said in a news conference on Monday that implementation of the tariffs would be paused for a month, after she and Mr Trump had a conversation and came to an agreement.

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 that are 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.

Tariffs graphic
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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 that 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 that Mexican drug cartels are operating in Canada.

Tariffs graphic

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 that 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 that 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 that “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 that 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 that “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 that 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 that 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 claimed the US action violates World Trade Organisation (WTO) rules, and vowed to bring a case before the body that governs global commerce.

It also threatened to take “necessary counter-measures to defend its legitimate rights and interests”.

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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 that 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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White House rages at ‘appalling’ attempt to return wrongly deported man from El Salvador

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White House rages at 'appalling' attempt to return wrongly deported man from El Salvador

The White House has hit out at an “appalling” attempt by a Democratic senator to return a father wrongly deported to El Salvador.

Chris Van Hollen arrived in El Salvador on Wednesday to speak to the country’s leaders about Kilmar Abrego Garcia, who was removed from the US by the Trump administration in March despite an immigration court order preventing his deportation.

Washington acknowledged Mr Garcia was deported due to an “administrative error”.

The US Supreme Court has called on the administration to facilitate his return, upholding a court order by Judge Paula Xinis, but Trump officials have claimed Mr Garcia has ties to the MS-13 gang.

Mr Garcia’s lawyers have argued there is no evidence of this.

Speaking about Mr Van Hollen’s trip to El Salvador, White House spokesperson Karoline Leavitt said the Democrats “still refuse to accept the will of the American people”.

She alleged Mr Garcia was an “illegal alien MS-13 terrorist” and claimed his wife petitioned for court protection against him after alleged incidents of domestic violence.

White House press secretary Karoline Leavitt.
Pic: AP/Jose Luis Magana
Image:
White House press secretary Karoline Leavitt.
Pic: AP/Jose Luis Magana

After outlining the allegations against Mr Garcia, she went on: “All of that is not enough to stop the Democrat Party from their lies.

“The number one issue they are focused on right now is bringing back this illegal alien terrorist to America.

“It’s appalling and sad that Senator Van Hollen and the Democrats are plotting his trip to El Salvador today, are incapable of having any shred of common sense or empathy for their own constituents and our citizens.”

After making a statement, Ms Leavitt introduced Patty Morin, who described graphic details of her daughter’s murder by an immigrant from El Salvador.

Rachel Morin was raped and murdered by Victor Martinez-Hernandez along a popular hiking trail northeast of Baltimore.

Afterwards, Ms Leavitt left without taking any questions from reporters.

Kilmar Abrego Garcia. Pic: CASA / AP
Image:
Kilmar Abrego Garcia. Pic: CASA/AP

Senator travels to El Salvador

Mr Van Hollen met with the El Salvador vice president during his trip to the Central American country.

But he did not meet with President Nayib Bukele, who publicly met with Donald Trump in the Oval Office this week, nor did he meet Mr Garcia himself.

US senator Chris Van Hollen speaking to the media in El Salvador. 
Pic: Reuters/Jose Cabezas
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US senator Chris Van Hollen has been in El Salvador.
Pic: Reuters/Jose Cabezas

In a post on X, he said he would continue to fight for Mr Garcia’s return.

During Mr Bukele’s trip to the White House earlier this week, he said he would not return Mr Garcia, likening it to smuggling “a terrorist into the United States”.

Along with Mr Garcia, the Trump administration has deported hundreds of people, mostly Venezuelans, who it claims are gang members without presenting evidence and without a trial.

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‘I’m talking about violent people’

Judge’s contempt warning

It comes hours after a US federal judge warned that he could hold the Trump administration in criminal contempt for violating his orders to turn around planes carrying deportees to El Salvador.

The comments are an escalation in a row which began last month when US district judge James E Boasberg issued an order temporarily blocking the deportations.

However, lawyers told him there were already two planes with immigrants in the air – one headed for El Salvador, the other for Honduras.

Mr Boasberg verbally ordered the planes to be turned around, but the directive was not included in his written order. The Trump administration then denied refusing to comply.

Charges could be brought forward by the Justice Department, NBC News, Sky’s US partner network, reported.

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However, that could create an uncomfortable situation for the department, which is headed by the attorney general – a position appointed by the president.

If the executive-led Justice Department refused to prosecute the matter, Judge Boasberg said he would appoint another attorney to prosecute the contempt.

The judge wrote: “The Constitution does not tolerate wilful disobedience of judicial orders – especially by officials of a coordinate branch who have sworn an oath to uphold it.”

He gave the government a 23 April deadline.

White House director of communications Steven Cheung said the administration would seek “immediate appellate relief” – a review of a decision within a lower court before the case has been resolved.

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Israeli troops will remain in ‘security zones’ in Gaza, Lebanon and Syria indefinitely, minister says

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Israeli troops will remain in 'security zones' in Gaza, Lebanon and Syria indefinitely, minister says

Israel’s troops will remain in “security zones” in Gaza, Lebanon and Syria indefinitely, according to the country’s defence minister.

Israeli forces have taken over more than half of the Gaza Strip in recent weeks in a renewed campaign to pressure the territory’s rulers Hamas to free hostages after a ceasefire ended last month.

Israel has also refused to withdraw from some areas in Lebanon following a truce with Hezbollah last year, and it seized a buffer zone in southern Syria after President Assad’s regime was overthrown last December.

Israeli defence minister Israel Katz said his forces “will remain in the security zones as a buffer between the enemy and [Israeli] communities in any temporary or permanent situation in Gaza – as in Lebanon and Syria”.

He said that “unlike in the past” the military was “not evacuating areas that have been cleared and seized”.

His comments could further complicate talks with Hamas over a ceasefire and the release of hostages.

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Gazans struggle to find bodies under rubble

On Wednesday, health officials said Israeli strikes in Gaza killed 22 people, including a girl who was less than a year old.

Fifty-nine hostages are still inside Gaza, 24 of whom are believed to be alive, after dozens of others were previously released in ceasefire agreements or other deals.

Israeli defence minister Israel Katz. Pic: AP
Image:
Israeli defence minister Israel Katz. Pic: AP

Meanwhile, Lebanese President Joseph Aoun said Israel’s continued presence in some areas in Lebanon was “hindering” the Lebanese army’s full deployment as required by the ceasefire negotiated with Israel.

The war left over 4,000 people dead, many of them civilians.

Two Israeli drone strikes in southern Lebanon on Wednesday killed two people, the health ministry said. The United Nations said Israeli strikes in Lebanon have killed more than 70 civilians since the ceasefire took effect in November.

Read more:
Lack of rescue equipment leaves Gazans dying under rubble
A timeline of events since the 7 October attacks

Israel has said it must keep control of some areas to prevent a repeat of the Hamas attack that triggered the latest conflict in Gaza.

The war began when militants attacked southern Israel on 7 October 2023, killing 1,200 people, mostly civilians, and kidnapping about 250.

Israel’s retaliatory offensive has killed more than 51,000 people, according to Gaza’s health ministry.

The figure includes more than 1,600 people killed since a ceasefire ended and Israel resumed its offensive last month to pressure Hamas to accept changes to the agreement.

The health ministry does not distinguish between civilians and combatants in its total count but said that more than half of the fatalities are women and children.

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Lack of heavy rescue equipment into Gaza leaves hundreds to die slow deaths under rubble

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Lack of heavy rescue equipment into Gaza leaves hundreds to die slow deaths under rubble

It was in the evening that the bombing started to intensify.

Salah Jundia, his father and brothers huddled together in their home in Shujaiyya, just east of Gaza City, trying to work out what to do.

It was too risky for them to leave at night. There were a lot of them too. Extended family living across four storeys. They decided they would wait until after dawn prayers.

The explosion tore through the building just before 5am, collapsing one storey on to the next.

The remains of where the family lived - where loved ones were trapped beneath the rubble
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The aftermath of Israel’s bombing campaign in Shujaiyya, just east of Gaza City

Salah Jundia
Image:
Salah Jundia

Jundia says he survived because pieces of bedroom furniture fell on top of him.

Then he looked for his father and brothers.

“I found one of them calling for help. I removed the rubble covering him with my hands. Then I saw another brother covered in rubble but he was dead,” he told Sky News.

Jundia added: “My father was also dead. My other brother was also dead. We got them out and that is when I saw that the whole building had collapsed.”

Over the next few hours, they scrambled to rescue who they could.

An aunt and uncle and one of their children, Shaimaa. Uncle Imad and his son Mohammad. The bodies of Montasir and Mustaf.

One of the child victims of the attack on the home in Gaza City
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One of the child victims of the attack on the home near the Gaza City

One of the child victims of the attack
Image:
Another one of child victims of the attack

Jundia says he could hear cries for help, but they were coming from deep in the rubble and were impossible to reach.

The rescue teams on site – civil defence they are called – did not have the kit to clear through three floors of 500 square metres, 30cm slabs of concrete.

Palestinians drilling to try and reach the people trapped below the rubble
Image:
Rescuers drilling to try and reach the people trapped below the rubble

Efforts to free those trapped beneath the rubble in Gaza City
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Efforts to free those trapped beneath the rubble near the Gaza City

In the afternoon, Jundia says Israel’s Defence Forces (IDF) told rescue teams to leave as they would be resuming their bombardment.

Jundia buried the bodies he had managed to pull out but he knew 15 of his family members, 12 of them children, were still somewhere inside the rubble, still crying for help.

He made a desperate video appeal, begging the Red Cross and Arab countries to pressure Israel to grant access to the site. It was picked up on a few social media accounts.

Israel won’t allow heavy equipment into Gaza. No diggers or bulldozers, nor the fuel or generators to run them.

They say it will fall into Hamas’s hands.

It was a major sticking point during the ceasefire and it is a major issue now as the bombardment continues, given the fact that hundreds if not thousands of civilians might survive if there were the equipment to extract them.

Members of Salah Jundia's family left alive after the attack
Image:
Members of Salah Jundia’s family left alive after the attack

Salah Jundia and his family
Image:
Salah Jundia and his surviving family

Civil defence trying to get to the Jundia family home over the next few days were halted because the IDF were in the vicinity. A family friend tried himself and was killed.

The footage that our camera teams have shot in Shujaiyya over the past two weeks shows how civil defence teams struggle to save those who are trapped and injured with the most rudimentary of equipment – plastering trowels, sledgehammers, ropes and small drills.

“The tight siege stops civil defence equipment from getting in,” says one.

They added: “So we are taking much longer to respond to these events. Time is a factor in getting these people out. So we call immediately for the necessary equipment to be allowed in for the civil defence to use.”

The IDF say they are investigating the circumstances around the Jundia family as a result of our enquiries.

In relation to the access of heavy equipment into Gaza, they say they work closely with international aid organisations to enable the delivery of humanitarian activities in accordance with international law.

The last contact Jundia had from beneath the rubble was a phone call from his uncle Ziad, three days after the strike.

“The line was open for 25 seconds then it went dead. We don’t know what happened. We tried to call, but there was no answer,” he says.

He and his family were displaced several times before they returned home to Shujaiyya – to Rafah in the south, then Khan Younis and Deir al-Balah.

Along the way, Jundia lost one brother and a nephew to Israeli bombs.

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“We were happy and all the family came back. We went back to our house. It was damaged, but we improvised and we lived in it. We have nothing to do with the resistance. We are not interested in wars. But we have been gravely harmed,” he says.

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