Donald Trump’s tariffs explained and why he’s using them against countries after he makes extreme announcement
It seems there's no escaping the news of US President Donald Trump and his stance on tariffs in recent days.
Trump was sworn in as the 47th president of the United States a little over a month ago (20 January), and ever since he's made some strong changes, including impacting relations with countries such as Canada, China and Mexico as well as the UK.
He has been accused by some of triggering a global trade war as other nations hit back at the US with tariffs of their own, with everything from cars to beer and materials like aluminium and steel being affected.
Here's what you need to know about tariffs and why they're being raised...
Advert
What are tariffs?
Tariffs are taxes charged on goods imported from other countries. So, for example, imposing a 20 percent tariff on goods means that a product worth $10 would have an additional $2 charge applied to it.
Tariffs of 25 percent have now come into force against goods hailing from Canada, which is one of the States' biggest trading partners.
Meanwhile, Mexico has also also been hit with a 25 percent tariff and China a 20 percent tariff.
The issue is that the likes of Canada and China have now retaliated with their own tariffs on US goods, signalling rumblings of a global trade war.
According to the Peterson Institute for International Economics, a thinktank estimated Trump's move would cost the typical US household upwards of $1,200 each year and claimed the tariffs amount to 'the largest tax increase in at least a generation'.
Why has Trump imposed tariffs?
The reason why Trump has raised tariffs on US imports is part of their plans to help 'make America great again' by enabling the country to gain political and economic concessions from allies and rivals on the world stage.
When the initial plans for new tariffs were announced, the White House said Trump was 'taking bold action to hold [the three countries] accountable to their promises of halting illegal immigration and stopping poisonous fentanyl and other drugs from flowing into our country'.
The backlash from other countries
After Trump's initial tariff stance, he was hit with a backlash from a number of countries.
One country in particular has taken a strong stance against the US, as new Canadian Prime Minister Mark Carney and the former PM Justin Trudeau have openly addressed the tariffs from the US and from Trump.
Trudeau addressed the US president directly as part of his exit speech this week, where he said: "Now as Canadians face from our neighbour an existential challenge and economic crisis, Canadians are showing what we are made off.
"Standing up for everyone’s fundamental rights is the only way to protect our freedom."
Carney has also been vocal against Trump, as he described America as a country that he 'could no longer trust', as per the BBC.
The ex Bank of England boss addressed escalating tariff-related tensions during a bold speech, in which he accused the 78-year-old Republican of 'attacking Canadian families'.
Carney also hit out at the US over the potential future tariffs the country might hit Canada with, as he added: "The Canadian government has rightly retaliated with tariffs. We will keep our tariffs on until the Americans show us respect. We did not ask for this fight. But Canadians are always ready when someone else drops the gloves."
He continued: "Make no mistake, Canada will win. We have made this the greatest country in the world and now our neighbours want to take us. No way. We can’t change Donald Trump … [but] because we’re masters in our own home, we can control our economic destiny."
Trump's future tariff plans
The American leader told press he'd be increasing tariffs on metal imports from Canada from 25 to 50 percent following the country's retaliation.
According to PA, Trump confessed that the reasoning for the decision came from the rise in prices that the government of Ontario placed on electricity sold to the US in retaliation to the US president's first move.
Posting on his own social media channel on 11 March, Trump penned: "I have instructed my Secretary of Commerce to add an ADDITIONAL 25% Tariff, to 50%, on all STEEL and ALUMINUM COMING INTO THE UNITED STATES FROM CANADA, ONE OF THE HIGHEST TARIFFING NATIONS ANYWHERE IN THE WORLD."
However, he's has since walked back on that threat.
What about the rest of the world?
After Trump imposed 25 percent tariffs on all steel and aluminium imports to America, the UK Prime Minister responded.
Speaking during the Prime Minister's Question Time, Sir Keir Starmer shared: "I'm disappointed to see global tariffs in relation to steel and aluminium, but we will take a pragmatic approach."
He added the government is 'negotiating an economic deal which covers and will include tariffs if we succeed, but we will keep all options on the table'.
The European Union also responded by announcing trade counter-measures.
Topics: Donald Trump, US News, Politics
Niamh Spence