Millions of people face council tax hikes over normal thresholds after the government allowed six areas to boost rates above the usual 5%.

More than two million people will be hit by increases of between 5 and 10%.

Windsor and Maidenhead Council wanted to increase council tax by 25% but the plan was blocked – instead it will go up by 9%.

Newham Council will go up by the same amount, while Bradford Council will put up taxes by 10% and Birmingham, Somerset and Trafford councils will all put up rates by 7.5%.

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Speaking to Sky News’ Kay Burley, health and social care minister Karin Smyth defended the above normal increases – saying “many more councils” asked for permission to hike taxes, but were refused.

She said the ones given the nod “are particularly desperate” and need the money to keep “basic services running”.

The Labour MP was quick to blame the Conservatives, saying local government was left in a “really, really dark state” by the previous government.

Deputy prime minister Angela Rayner – who is also the secretary of state for local government – confirmed the move on Monday.

She said the average council tax increase across the country would not surpass last year’s total of 5.1%.

She also said more than £69bn in central funding would be made available to regional administrators, a rise of 6.8% compared to the 2024-25 period. Close to £4bn has also been put aside to help councils with social care.

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The Conservatives accused Labour of “pushing the burden on to taxpayers after they promised to freeze council tax”.

Shadow communities secretary Kevin Hollinrake said: “Their Local Government Finance Settlement will mean that councils will have to raise council tax to accommodate Labour’s jobs tax.

“This means that local people will pay more for less when it comes to local services, especially in rural areas which are losing the Rural Services Delivery Grant that Labour have abolished.

“The Labour Party have made false promises to local people, promising to freeze council tax while many councils will now have to raise it due to Labour’s political choice to raise council tax.”

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The County Councils Network, which represents 37 administrations, said they are facing pressure from the government’s decisions to increase national insurance contributions for employers, and increases to minimum wage.

Barry Lewis, the network’s finance spokesperson said: “More than four in five CCN members say they are in a worse position than before the autumn budget and this finance settlement, and one-third say their service reductions next year will now be severe.

“Considering there is very little fat left to cut from many of these services already, a further reduction will have a material impact on our residents.”

Ms Rayner confirmed allocations worth £502m to assist councils with the impact of increases to employer national insurance contributions.

China has retaliated after the US imposed 10% tariffs on its goods.

Not long after the US taxes began at 5am British time, China said it was 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.

President Trump said his actions were in response to what he described as Beijing’s failure to stop the flow of fentanyl, a synthetic opioid, into the US.

Mr Trump added that the tariffs on China could just be the start, though the White House said he was due to talk to President Xi Jinping.

“China hopefully is going to stop sending us fentanyl, and if they’re not, the tariffs are going to go substantially higher,” Mr Trump said.

China has described fentanyl as America’s problem and said it would challenge the tariffs at the World Trade Organisation, as well as taking other countermeasures.

But it also left the door open for talks.

The issue of fentanyl is only one part of Mr Trump’s issue with China. He has long railed against the trade imbalance between the first and second-largest economies in the world.

Tariffs paused

Earlier, the imposition of 25% tariffs on Mexico and Canada was paused after agreements were reached on border security.

Mexico was first to make a deal with the White House. Its president, Claudia Sheinbaum, said she was sending 10,000 National Guard troops to the US border immediately in return for a tariff delay.

Mr Trump said the Mexican soldiers would be “specifically designated” to stop the flow of fentanyl into the US, as well as illegal migrants. Further negotiations will now be carried out, he added.

Ms Sheinbaum said she had a “good conversation” with him lasting at least 30 minutes just hours before the tariffs were due to begin.

She also extracted a concession from Mr Trump – after explaining the “seriousness” of high-powered weapons coming over the border from the US and getting into the hands of criminal groups.

“It gives them firepower,” she said. “We asked that the US also help our country by helping stop this arms trafficking… he agreed.”

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Canada made similar moves. Prime Minister Justin Trudeau said almost 10,000 frontline personnel “are and will be working on protecting the border”.

He added on X that his country was appointing a “fentanyl czar”, drug cartels would be listed as terrorists, and there would be “24/7 eyes on the border”.

There will also be a Canada-US joint strike force to “combat organised crime, fentanyl and money laundering”, Mr Trudeau announced.

Both Mr Trudeau and Mr Trump will view the deal as a win – Mr Trump for seemingly forcing the US’s northern neighbour to act, and Mr Trudeau for heading off sanctions with measures that for the most part (with the exception of the fentanyl czar) had already been announced in December.

Mr Trump said he was “very pleased with this initial outcome” and work will begin to see how a “Final Economic Deal” with Canada can be structured.

What is the UK situation on tariffs?

President Trump hates trade deficits, and does not want to import more goods from another country than are sent there in return, says Sky’s economics and data editor, Ed Conway.

But Britain has bigger trade deficits than the US, Conway adds, and is one of the few countries in the world to import more goods from America than America imports from it.

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In addition, because the UK is no longer part of the European Union, any tariffs imposed on Brussels will not affect London.

When asked about the UK, Mr Trump said: “I think that one can be worked out.”

Sir Keir Starmer said it was “early days”.

What if Britain has, almost entirely by accident, navigated itself into about the best possible position it could be in, as Donald Trump embarks on a trade war with nearly all his economic partners?

I realise this might, at first, sound a little odd. After all, when the world is facing economically-destructive measures (blanket tariffs are invariably value-destructive, in the short run at least) it’s hard to see much in the way of victories. Moreover, when it comes to Donald Trump, no one, including his own cabinet and staff, can quite predict what will happen next. Consider the roller-coaster over tariffs in the past few days alone.

Even so, the fact remains that of all the countries and regions in the world, Britain seems much less likely than most to face the kind of peremptory tariffs the president is so keen on.

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To see why, it helps to remember that the one thing Mr Trump hates above all else is trade deficits – when you import more goods (and it seems to be goods he mostly cares about) from another country than you send there in return.

America has an enormous trade deficit with China and with Mexico too, not to mention a smaller but not insubstantial deficit with Canada. When the president talks about the reasons for his tariffs he sometimes mentions illegal fentanyl imports, but, even more often, he references the size of the trade deficits. He wants America to make more stuff domestically and suck in less stuff from overseas.

We could have a long conversation (and I suspect we probably will have a long conversation in the coming months) about the extent to which deficits are, per se, a bad thing. But in the short run let’s focus on the UK and its strengths in this game.

First, since the UK is no longer part of the European Union, it will not automatically face the same trade terms as its neighbours on the continent. If the US imposes tariffs on the EU, Britain will not necessarily face them.

Second, if there is one country in the world with even bigger trade deficits than the US, it’s Britain. This country has deindustrialised even quicker than America, with the upshot that unlike the EU or Canada or Mexico, Britain is one of the few countries in the world to import more goods from America than America imports from it.

Footnote: that last point actually depends on whose numbers you’re looking at. Look at America’s figures and it has a trade surplus with the UK. Look at Britain’s figures and America has a trade deficit with us. But either way, both are very small. The numbers are essentially balanced.

Third, in recent months, the new Labour government has begun to improve its relationship with China. Chancellor Rachel Reeves went on a financial diplomacy mission to Beijing last month. And unlike nearly every other industrialised country in the developed world, Britain has not imposed tariffs on imports of Chinese electric vehicles.

Many diplomats have raised their eyebrows about this, but in the event that America wanted to do a deal with Britain, this is precisely the kind of thing the government could quickly reverse: “Oh alright then – in return for this trade deal, we’re willing to impose those tariffs on China – the ones everyone else has already introduced.”

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The funny thing about these three strengths is that, first off, up until recently many would have seen each of them – Brexit, our deindustrialisation and our cosying up to China – as weaknesses rather than strengths. They certainly weren’t part of any grand strategic plan.

Even so, the UK nonetheless finds itself in an unexpectedly propitious position when it comes to negotiating with the US. It has a better chance than most nations to act as a diplomatic bridge between America and Europe. Its chances of sealing that much-vaunted trade deal with the US have improved rather than deteriorated. Indeed, I’m told that leading members of the administration believe a trade deal with the UK could be sealed in a matter of months.

Whether that actually eventuates remains to be seen. After all, if there’s one thing you can’t predict when it comes to Donald Trump it’s, well, anything.