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The US president has promised to target countries which charge tax on US imports by matching them with a reciprocal tariff.

Donald Trump has ordered his team to start calculating duties by early April – increasing fears of a global trade war that could also accelerate US inflation.

“On trade, I have decided for purposes of fairness, that I will charge a reciprocal tariff, meaning whatever countries charge the United States of America, we will charge them. No more, no less,” he posted on Truth Social.

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What is America’s trade position?

It is set to spark negotiations with dozens of countries aimed at lowering their tariffs and trade barriers. The US wants to shrink its goods trade deficit which topped $1.2trn (£954bn) last year.

A White House official said that countries with large US trade surpluses could be targeted first. The top five are China, Mexico, Vietnam, Ireland and Germany, according to the US Census Bureau.

Trump’s total trade war


Paul Kelso - Health correspondent

Paul Kelso

Business and economics correspondent

@pkelso

Taken at face value Donald Trump’s embrace of reciprocal tariffs is a declaration of total trade war.

It would amount to perhaps the single biggest peacetime shock to global commerce.

In promising to levy import taxes on any nation that imposes tariffs or VAT on US exports, he is following through on a campaign promise.

The aim is to address a near trillion dollar trade deficit – the difference between the value of America’s exports and its imports – that he believes amounts to a tax on American jobs.

In response, he wants to deploy tariffs to simultaneously ease the US deficit and – in theory – price out imports in favour of domestic production.

His primary targets appear to be the major trading partners with whom the trading deficit is greatest.

It is a blow to the emerging view in Whitehall that Britain might wriggle through the chaos relatively unscathed.

Read more from Paul here.

UK government minister Pat McFadden told Sky News’ Politics Hub with Sophy Ridge that Britain will take a “wait and see” approach when it comes to the tariffs. He refused to say if the government would retaliate.

Trump latest: New tariffs signal ‘total trade war’

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The UK could be hit with tariffs as high as 24% if Mr Trump follows through on his threats to treat VAT as a tariff, according to Paul Ashworth, chief North America economist at Capital Economics.

Although some estimates are lower, he thinks Britain would be the fourth hardest hit, following India (29%), Brazil (28%) and the EU (25%).

This is based on VAT rates combined with existing tariffs, but the Trump administration also intends to take into account regulations, government subsidies, digital services taxation policies and exchange rate policies.

Read more from Sky News:
Trump wants Russia to return to G7
Ukraine peace talks risk short-term win

“Most people would consider VAT to be a non-discriminatory tax since it is also applied to domestically-produced goods making a level playing field,” said Mr Ashworth.

But the US still argues that VAT is a form of discriminatory tariff because America applies a much lower average sales tax at state level.

India's Prime Minister Narendra Modi speaks as President Donald Trump listens during a news conference in the East Room of the White House, Thursday, Feb. 13, 2025, in Washington. (AP Photo/Ben Curtis)
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Narendra Modi and Donald Trump at the White House. Pic: AP

On Thursday, Mr Trump also held a meeting with Indian Prime Minister Narendra Modi, agreeing to join forces on artificial intelligence, semiconductors and strategic minerals.

During a news conference afterwards, Mr Trump said India has been “very strong on tariffs” and “it’s very hard to sell into India”, adding: “They’re going to be purchasing a lot of our oil and gas.”

India’s tariff rates are the highest, according to the World Trade Organisation, with a simple average 17% rate for all products compared to 3.3% for the US.

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What is the possible Gaza hostage and ceasefire deal – and what challenges could lie ahead?

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What is the possible Gaza hostage and ceasefire deal - and what challenges could lie ahead?

An Israeli delegation is heading to Qatar for indirect talks with Hamas on a possible hostage and ceasefire deal in Gaza.

The development comes ahead of a meeting between Israeli Prime Minister Benjamin Netanyahu and US President Donald Trump in Washington DC on Monday aimed at pushing forward peace efforts.

The US leader has been increasing pressure on the Israeli government and Hamas to secure a permanent ceasefire and an end to the 21-month-long war in Gaza.

Smoke rises in Gaza following an explosion. Pic: Reuters
Image:
Smoke rises in Gaza following an explosion. Pic: Reuters

Mr Trump said on Tuesday on social media that Israel had agreed “to the necessary conditions to finalise” a deal on a truce.

And Hamas, which runs the coastal Palestinian territory, said on Friday it has responded to the US-backed proposal in a “positive spirit”.

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So what is in the plan?

The plan is for an initial 60-day ceasefire that would include a partial release of hostages held by the militant group in exchange for more humanitarian supplies being allowed into Gaza.

The proposed truce calls for talks on ending the war altogether.

The war in Gaza began after Hamas attacked Israel on 7 October 2023, killing 1,200 people and taking 250 others hostage. Dozens of hostages have since been released or rescued by Israeli forces, while 50 remain in captivity, including about 30 who Israel believes are dead.

The proposal would reportedly see about half of the living hostages and about half of the dead hostages returned to Israel over 60 days, in five separate releases.

Eight living hostages would be freed on the first day and two released on the 50th day, according to an Arab diplomat from one of the mediating countries, it is reported.

Five dead hostages would be returned on the seventh day, five more on the 30th day and eight more on the 60th day.

That would leave 22 hostages still held in Gaza, 10 of them believed to be alive. It is not clear whether Israel or Hamas would determine who is to be released.

Hamas has sought guarantees that the initial truce would lead to a total end to the war and the withdrawal of Israeli troops from Gaza.

A Hamas official has said Mr Trump has guaranteed that the ceasefire will extend beyond 60 days if necessary to reach a peace deal, but there is no confirmation from the US of such a guarantee.

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Contractors allege colleagues ‘fired on Palestinians’

Possible challenges ahead

And in a sign of the potential challenges still facing the two sides, a Palestinian official from a militant group allied with Hamas said concerns remained.

The concerns were over humanitarian aid, passage through the Rafah crossing in southern Israel to Egypt and clarity over a timetable for Israeli troop withdrawals.

Hamas’s “positive” response to the proposal had slightly different wording on three issues around humanitarian aid, the status of the Israeli Defense Forces (IDF) inside Gaza and the language around guarantees beyond the 60-day ceasefire, a source with knowledge of the negotiations revealed.

But the source told Sky News: “Things are looking good.”

The Times of Israel reported Hamas has proposed three amendments to the proposed framework.

According to a source, Hamas wants the agreement to say that talks on a permanent ceasefire will continue until an agreement is reached; that aid will fully resume through mechanisms backed by the United Nations and other international aid organisations; and that the IDF withdraws to positions it maintained before the collapse of the previous ceasefire in March.

Mr Netanyahu’s office said in a statement that changes sought by Hamas to the ceasefire proposal were “not acceptable to Israel”.

However, his office said the delegation would still fly to Qatar to “continue efforts to secure the return of our hostages based on the Qatari proposal that Israel agreed to”.

Read more:
‘Two security workers injured after grenades thrown at aid site’
The man in the room acting as backchannel for Hamas in negotiations with US

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Another potential challenge is that Mr Netanyahu has repeatedly said Hamas must be disarmed, which is a demand the militant group has so far refused to discuss.

Hamas has said it is willing to free all the hostages in exchange for a full withdrawal of Israeli troops and an end to the war in Gaza.

Israel rejects that offer, saying it will agree to end the war if Hamas surrenders, disarms and goes into exile – something that the group refuses.

Previous negotiations have stalled over Hamas demands of guarantees that further negotiations would lead to the war’s end, while Mr Netanyahu has insisted Israel would resume fighting to ensure the group’s destruction.

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Defiance in Tehran as Khamenei makes appearance

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Defiance in Tehran as Khamenei makes appearance

They rose to their feet in ecstatic surprise, shouting “heydar, heydar” – a Shia victory chant.

This was the first public appearance of their supreme leader since Israel began attacking their country.

He emerged during evening prayers in his private compound. He said nothing but looked stern and resolute as he waved to the crowd.

He has spent the last weeks sequestered in a bunker, it is assumed, for his safety following numerous death threats from Israel and the US.

His re-emergence suggests a return to normality and a sense of defiance that we have witnessed here on the streets of Tehran too.

Earlier, we had filmed as men in black marched through the streets of the capital to the sound of mournful chants and the slow beat of drums, whipping their backs with metal flails.

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Defiance on streets of Tehran

This weekend they mark the Shia festival of Ashura as they have for 14 centuries. But this year has poignant significance for Iranians far more than most.

The devout remember the betrayal and death of Imam Hussein as if it happened yesterday. We filmed men and women weeping as they worshipped at the Imamzadeh Saleh Shrine in northern Tehran.

The armies of the Caliph Yazid killed the grandson of the Prophet Muhammad in the seventh-century Battle of Karbala.

Shiite Muslims mark the anniversary every year and reflect on the virtue it celebrates, of resistance against oppression and injustice.

But more so than ever in the wake of Israel and America’s attacks on their country.

The story is one of prevailing over adversity and deception. A sense of betrayal is keenly felt here among people and officials.

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Listen to The World with Richard Engel and Yalda Hakim every Wednesday

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Many Iranians believe they were lured into pursuing diplomacy as part of a ruse by the US.

Iran believed it was making diplomatic progress in talks with America it hoped could lead to a deal. Then Israel launched its attacks and, instead of condemning them, the US joined in.

Death to Israel chants resounded outside the mosque in skies which were filled for 12 days with the sounds of Israeli jets. There is a renewed sense of defiance here.

One man told us: “The lesson to be learned from Hussein is not to give in to oppression even if it is the most powerful force in the world.”

A woman was dismissive about the US president. “I don’t think about Trump, nobody likes him. He always wants to attack too many countries.”

Pictures on billboards nearby draw a line between Imam Hussein’s story and current events. The seventh-century imam on horseback alongside images of modern missiles and drones from the present day.

Other huge signs remember the dead. Iran says almost 1,000 people were killed in the strikes, many of them women and children.

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Officially Iran is projecting defiance but not closing the door to diplomacy.

Government spokeswoman Dr Fatemeh Mohajerani told Sky News that Israel should not even think about attacking again.

“We are very strong in defence and as state officials have announced, this time Israel will receive an even stronger response compared to previous times,” she said.

“We hope that Israel will not make such a mistake.”

But there is also a hint of conciliation: Senior Iranian officials have told Sky News that back-channel efforts are under way to explore new talks with the US.

Israel had hoped its attacks could topple the Iranian leadership. That proved unfounded, the government is in control here.

For many Iranians, it seems quite the opposite happened – the 12-day war has brought them closer together.

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‘Nobody likes Trump’: Sky News finds defiance on the streets of Tehran

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'Nobody likes Trump': Sky News finds defiance on the streets of Tehran

To the sound of mournful chants and the slow beat of drums, they march, whipping their backs with metal flails.

It is an ancient ceremony going back almost 14 centuries – the Shia commemoration of Ashura.

But this year in particular has poignant significance for Iranians.

The devout remember the betrayal and death of the Imam Hussein as if it happened yesterday.

The Shia commemoration of Ashura in Tehran, 2025
Image:
Iranians gather ahead of Ashura

The Shia commemoration of Ashura in Tehran, 2025

We filmed men and women weep as they worshipped at the Imamzadeh Saleh Shrine in northern Tehran.

The grandson of the Prophet Muhammad was killed by the armies of the Caliph Yazid in the seventh century Battle of Karbala.

More on Iran

Shia Muslims mark the anniversary every year and reflect on the virtue it celebrates – of resistance against oppression and injustice. But more so than ever this year, in the wake of Israel and America’s attacks on their country.

The story is one of prevailing over adversity and deception. A sense of betrayal is keenly felt here by people and officials.

The Shia commemoration of Ashura in Tehran, 2025
Image:
Men and women weeped as they worshipped at the Imamzadeh Saleh Shrine

Many Iranians believe they were lured into pursuing diplomacy as part of a ruse by the US.

Iran believed it was making diplomatic progress in talks with America, which it hoped could lead to a deal. Then Israel launched its attacks and, instead of condemning them, the US joined in.

“Death to Israel” chants resounded outside the mosque in skies that for 12 days were filled with the sounds of Israeli jets.

There is a renewed sense of defiance here.

One man told us: “The lesson to be learned from Hussein is not to give in to oppression, even if it is the most powerful force in the world.”

I don't think about Trump. Nobody likes him," one woman tells Sky News
Image:
‘I don’t think about Trump. Nobody likes him,’ one woman tells Sky News

A woman was dismissive about the US president.

“I don’t think about Trump. Nobody likes him. He always wants to attack too many countries.”

Pictures on billboards nearby link Imam Hussein’s story and current events. They show the seventh century imam on horseback alongside images of modern missiles and drones from the present day.

The Shia commemoration of Ashura
The billboard illustrates the 7th century imam on horseback alongside missiles and drones from the present day

Other huge signs remember the dead. Iran says almost 1,000 people were killed in the strikes, many of them women and children.

Officially Iran is projecting defiance, but not closing the door to diplomacy.

Government spokeswoman Dr Fatemeh Mohajerani told Sky News that Israel should not even think about attacking again.

“We are very strong in defence, and as state officials have announced, this time Israel will receive an even stronger response compared to previous times. We hope that Israel will not make such a mistake.”

Government spokeswoman Dr Fatemeh Mohajerani told Sky News that Israel should not even think about attacking again
Image:
Dr Fatemeh Mohajerani said it would be a mistake for Israel to attack again

But there is also a hint of conciliation. Senior Iranian officials have told Sky News back-channel efforts are under way to explore new talks with the US.

Israel had hoped its attacks could topple the Iranian leadership. Those hopes proved unfounded. The government is in control here.

For many Iranians it seems quite the opposite happened – the 12-day war has brought them closer together.

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