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  • What are tariffs, how do they work and why is Trump using them?

    What are tariffs, how do they work and why is Trump using them?


    Getty Images US President Donald Trump signs an executive order in the Oval Office at the White House in Washington, DC on 23 April 2025.  A red baseball hat embroidered with "Make America Great Again" in white thread sits to the left of the document, which shows Trump's distinctive signatureGetty Images

    US President Donald Trump has threatened to impose fresh tariffs on eight allies that oppose his demands for control of Greenland.

    Last year, he placed taxes on goods reaching the US from countries around the world, arguing the move would boost American manufacturing and create jobs.

    Critics warned of higher prices and damage to the global economy.

    What are tariffs and how do they work?

    Tariffs are taxes on imported goods.

    Typically, the charge is a percentage of a good’s value.

    For example, a 10% tariff on a $10 product would mean a $1 tax on top – taking the total cost to $11 (£8.17).

    The tax is paid to the government by companies bringing in the foreign products.

    These firms may pass some or all of the extra cost on to their customers, which in this case means ordinary Americans and other US businesses.

    They may also decide to import fewer goods.

    Why is Trump using tariffs?

    Trump says tariffs increase the amount of tax raised by the government, encourage consumers to buy more American-made goods and boost investment in the US.

    He wants to reduce the US trade deficit – the gap between the value of goods it buys from other countries and those it sells to them.

    The president argues that the US has been exploited by “cheaters” and “pillaged” by foreigners.

    Trump has also used tariffs to make other demands.

    He has threatened fresh tariffs of 10% on the UK, Denmark, Norway, Sweden, France, Germany, the Netherlands, and Finland, because they oppose a US takeover of Greenland. Trump said the tariffs would be in place by 1 February and would rise to 25% by 1 June.

    When announcing tariffs against China, Mexico and Canada, he said the countries must do more to stop migrants and the illegal drug fentanyl reaching the US.

    Many tariffs have been amended or delayed after being announced.

    Why has the Supreme Court been considering the legality of Trump’s tariffs?

    Trump’s tariffs have faced numerous legal challenges.

    Instead of getting Congressional approval, the Trump administration used the 1977 International Emergency Economic Powers Act. Declaring an emergency under the law meant Trump could issue immediate orders and bypass Congress.

    In August 2025, a US appeals court ruled that most of Trump’s tariffs were illegal, but left them in place.

    The White House asked the US Supreme Court to overturn that decision. A ruling is expected in the coming weeks.

    Trump has posted on social media that it would be a “complete mess” if the Supreme Court struck down his tariffs, and warned of difficulties if businesses were told they could claim refunds.

    “It would take many years to figure out what number we are talking about and even, who, when, and where, to pay,” Trump said.

    What are Trump’s tariffs on countries?

    Negotiations are continuing with a number of countries, including America’s top three trading partners.

    China, Canada and Mexico were all warned that they faced particularly high tariffs:

    • Mexico is facing 30% tariffs on its goods, plus the sector-specific levies and a 25% fentanyl tariff. However, like Canada, most of its goods are exempt under the USMCA. The tariffs were put on hold until the end of October to allow time to strike a deal. On 27 October, Mexican President Claudia Sheinbaum said she and Trump had agreed to extend this deadline by “a few more weeks”. Talks are ongoing

    A patchwork of different rates is in place for other countries.

    Many of these stem from Trump’s announcement in April 2025 that a “baseline” of 10% would apply to imports from all countries. Nations considered the “worst offenders” would face higher rates, as payback for unfair trade policies.

    New tariff rates for dozens of countries were subsequently introduced in August, after delays to allow for trade talks.

    These include:

    On 13 January, Trump announced the US would apply a 25% tariff to countries which continue to trade with Iran, after Tehran cracked down on anti-government protests, with thousands of people feared dead.

    On 17 January, the US president said he would impose a 10% tariff on eight countries who are opposed to his proposed takeover of Greenland.

    The extra tariff on goods from Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands and Finland would come into force on 1 February, but could later rise to 25% – and would last until a deal was reached.

    What is the UK tariff deal?

    Reuters US President Donald Trump holds up a printed copy of the UK-US tariffs deal at the G7 summit in Canada. He stands next to UK Prime Minister Sir Keir Starmer who is smilingReuters

    In June 2025, the UK negotiated a 10% US tariff rate, the lowest so far of any country that has struck a deal with Trump.

    It exported about £58bn of goods to the US in 2024 – mainly cars, machinery and pharmaceuticals.

    The 10% rate applies to the first 100,000 UK vehicles exported every year – roughly the number of cars sold in 2024. Additional vehicles face the standard 25% tariff.

    The agreement also lets the two countries sell beef to each other. Some US ethanol will face 0% tariffs, instead of 19%.

    Trump announced “the deal was done” in June, but did not confirm the expected removal of all charges on steel imports from the UK.

    The UK is the only country which does not face 50% tariffs on steel and aluminium. It pays 25% instead.

    The BBC understands the plan to eliminate tariffs on UK steel exports entirely has now been put on hold.

    However, speaking to reporters ahead of his second state visit to the UK in September, Trump said he was “into helping” Britain fine-tune the deal.

    Which goods are affected by Trump’s tariffs?

    Some taxes announced by Trump are on particular products, wherever they are made.

    These include:

    Reuters A worker wearing a face mask works on a production line manufacturing bicycle steel rim at a factory in Hangzhou, Zhejiang, China. Reuters

    The US is the biggest importer of steel in the world after the EU, with most coming from Canada, Brazil, Mexico and South Korea

    In addition, Trump ended an exemption for imports valued at $800 (£592) or less.

    It means low-cost goods are no longer duty-free – a move affecting millions of packages sent every day, including those from online retailers like Shein and Temu.

    The companies shipping the parcels now have to pay duties based on the tariff rate which applies to the country the goods were sent from. Otherwise, for six months, they can choose to pay a fixed fee of between $80 and $200 per package.

    On 2 January, the White House confirmed it had slashed proposed tariffs of almost 92% on some imported pasta.

    The government had alleged that certain Italian-made goods were being sold at “less than normal value” in the US, undercutting local producers, but reduced the level of the tariffs after what it called constructive engagement with the firms in question.

    In November, Trump signed an executive order exempting a range of other food products from tariffs, including avocados, bananas, beef and coffee. The administration said it acted because the specified goods could not be produced in sufficient quantities domestically.

    Are prices going up for US consumers?

    Shoppers have seen price rises for some products, including toys, appliances and furniture as well as certain foodstuffs.

    US inflation was 3% in the 12 months to September, having gone up since April, when it stood at 2.4%.

    It fell back to 2.7% in November, and remained at that level in December, which was lower than many analysts had expected.

    Many firms have said they will pass on the cost of tariffs to US customers, including Target, Walmart and Adidas.

    The cost of goods manufactured in the US using imported components is also expected to rise.

    For example, car parts typically cross the US, Mexican and Canadian borders multiple times before a vehicle is completely assembled.

    How are tariffs affecting the US and global economies?

    Trump was accused of throwing the global economy into turmoil when he announced the first tariffs of his second presidential term.

    Although financial markets have since largely recovered, in October 2025 the International Monetary Fund (IMF) said the overall picture remained volatile, and that US tariffs were having a negative effect.

    It forecast global growth of 3.2% for 2025, and 3.1% in 2026. That was a slight increase from its July predictions, but still below the 3.3% it had projected for both years before Trump’s measures were announced.

    It thinks the US economy will grow by 2% in 2025, and 2.1% in 2026. That’s down from the 2.8% growth recorded in 2024, but still the fastest among the world’s most advanced economies.

    The most recent US figures show the economy picked up speed over the three months to September 2025, as consumer spending jumped and exports increased.

    The economy grew at an annual rate of 4.3%, up from 3.8% in the previous quarter. That was better than expected, and marked the strongest growth in two years.

    Imports – which count against growth – continued to decline during the period.



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  • Spanish PM vows to find cause of deadly high-speed train crash

    Spanish PM vows to find cause of deadly high-speed train crash


    Watch: At the scene of Spain’s worst rail disaster in over a decade

    Spanish Prime Minister Pedro Sanchez has promised to get to the bottom of why two high-speed trains collided in southern Spain killing at least 40 people, as rescuers continue to search the wreckage.

    After visiting the site of the crash, Sanchez also announced three days of national mourning for victims.

    More than 120 more people were injured as carriages on a Madrid-bound train derailed and crossed over to the opposite tracks, colliding with an oncoming train in Adamuz on Sunday evening.

    The crash is the worst the country has seen in more than a decade.

    Rail network operator Adif said the collision happened at 19:45 local time (18:45 GMT) on Sunday, about an hour after one of the trains left Málaga heading north to Madrid, when it derailed on a straight stretch of track near the city of Córdoba.

    The force of the crash pushed the carriages of the second train into an embankment, according to Transport Minister Óscar Puente. He added that most of those killed and injured were in the front carriages of the second train, which was travelling south from Madrid to Huelva.

    Rescue teams said the twisted wreckage of the trains made it difficult to recover people trapped inside the carriages.

    Sanchez visited the site of the crash with senior officials on Monday afternoon.

    “This is a day of sorrow for all of Spain, for our entire country,” he told reporters.

    “We are going to get to the truth, we are going to find the answer, and when that answer about the origin and cause of this tragedy is known, as it could not be otherwise, with absolute transparency and absolute clarity, we will make it public.”

    Puente said an investigation could take at least a month, describing the incident as “extremely strange”.

    Reuters Four rescuers dressed in black, one wearing a high-viz jacket, walk around behind a derailed carriage on a trackbed strewn with debris.Reuters

    Rescuers are still searching the wreckage at the crash site

    EPA Spain's Prime Minister Pedro Sanchez (centre) arrives with Minister of Transport Oscar Puente (left) and First Deputy Prime Minister Maria Jesus Montero (right) and other officials at Adamuz. All are wearing high-viz jackets.EPA

    Pedro Sánchez travelled to Spain to pay tribute to the people killed

    But Reuters news agency quoted an unnamed source briefed on initial investigations as saying experts had found a faulty joint on the rails, which was causing a gap between rail sections to widen as trains travelled over it. They added that the joint was key to identifying the cause of the accident.

    Spain’s El País newspaper said it was not clear whether the fault was a cause or a result of the crash.

    Four hundred passengers and staff were on board the two trains, the rail authorities said. Emergency services treated 122 people, with 41, including children, still in hospital. Of those, 12 are in intensive care.

    Puente said the death toll “is not yet final”. Officials are working to identify the dead.

    The type of train involved in the crash was a Freccia 1000, which can reach top speeds of 400 km/h (250 mph), a spokesperson for the Italian rail company Ferrovie dello Stato told Reuters.

    A map of Spain highlighting a section of the country’s high‑speed rail network. A blue line marks the high‑speed rail route running between Madrid in central Spain and Málaga in the south. A red dot marks Adamuz in the province of Córdoba near the midpoint of the route, where the two trains collided.

    Salvador Jimenez, a journalist with RTVE who was on one of the trains, said the impact felt like an “earthquake”.

    “I was in the first carriage. There was a moment when it felt like an earthquake and the train had indeed derailed,” Jimenez said.

    Footage from the scene appears to show some train carriages had tipped over on their sides. Rescue workers can be seen scaling the train to pull people out of the lopsided train doors and windows.

    A Madrid-bound passenger, José, told public broadcaster Canal Sur: “There were people and screaming, calling for doctors.”

    All high-speed services between Madrid and the southern cities of Malaga, Cordoba, Sevilla and Huelva have been suspended until Friday.

    Watch: Footage inside Spanish train as passengers evacuate from crash

    King Felipe VI and Queen Letizia said they were following news of the disaster “with great concern” and offered their “most heartfelt condolences”.

    The emergency agency in the region of Andalusia urged any crash survivors to contact their families or post on social media that they are alive.

    The Spanish Red Cross has deployed emergency support services to the scene, while also offering counselling to families nearby.

    Miguel Ángel Rodríguez from the Red Cross told RNE radio: “The families are going through a situation of great anxiety due to the lack of information. These are very distressing moments.”

    In 2013, Spain suffered its worst high-speed train derailment in Galicia, north-west Spain, which left 80 people dead and 140 others injured.

    Spain’s high-speed rail network is the second largest in the world, behind China, connecting more than 50 cities across the country. Adif data shows the Spanish rail is more than 4,000km long (2,485 miles).



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  • Trump says he will ‘100%’ carry out Greenland tariffs threat, as EU vows to protect its interests

    Trump says he will ‘100%’ carry out Greenland tariffs threat, as EU vows to protect its interests


    AFP via Getty Images Composit image of Donald Trump and Kaja Kallas. Both are looking towards the camera, Kallas has two microphones in front of her whereas Trump is outside wearing a navy coat and a red tie.AFP via Getty Images

    Kaja Kallas, the EU’s foreign policy chief, said the bloc has “no interest to pick a fight, but we will hold our ground”.

    Donald Trump has vowed to “100%” follow through on his threat to impose tariffs on European countries who oppose his demand to take control of Greenland.

    European allies have rallied around Greenland’s sovereignty. Denmark’s foreign minister emphasised the US president cannot threaten his way to ownership of the semi-autonomous Danish territory.

    UK Foreign Secretary Yvette Cooper reiterated the UK’s position that the future of Greenland is for “Greenlanders and for the Danes alone” to decide.

    On Monday, Trump declined to rule out the use of force and insisted he would press ahead with the threatened tariffs on goods arriving in the US from the UK and seven other Nato-allied countries.

    Asked by NBC News if he would use force to seize Greenland, Trump answered: “No comment”.

    The US president said he would charge Britain a 10% tariff “on any and all goods” sent to the US from 1 February, increasing to 25% from 1 June, until a deal is reached for Washington to purchase Greenland from Denmark.

    Trump said the same would apply to Denmark, Norway, Sweden, France, Germany, the Netherlands and Finland – all of whom are members of the defence alliance Nato which was founded in 1949.

    Asked if he will follow through on the tariff threat, Mr Trump told NBC News: “I will, 100%.”

    AFP via Getty Images  People walk past Greenlandic flags outside a shop in the city centreAFP via Getty Images

    Trump added: “Europe ought to focus on the war with Russia and Ukraine because, frankly, you see what that’s gotten them… That’s what Europe should focus on – not Greenland.”

    Denmark has warned that US military action in Greenland would spell the end of Nato. In recent days, Greenland has received support from European members of the alliance – some even sent a handful of troops to Greenland last week in a move seen as symbolic.

    However, Trump followed that deployment with an announcement to impose tariffs on the eight Nato allies.

    Danish foreign minister Lars Løkke Rasmussen said that Europe had to show President Trump tariff threats were “not the way forward”.

    “We have red lines that can’t be crossed,” he told Sky News. “You can’t threaten your way to ownership of Greenland. I have no intention of escalating this situation.”

    Nato secretary general Mark Rutte said the alliance will keep working with Denmark and Greenland on the security of the Arctic.

    The European Union is to hold an emergency summit in Brussels for its leaders on Thursday where they will discuss how to respond to Trump’s latest threat to take over Greenland.

    Kaja Kallas, the EU’s foreign policy chief, said the bloc has “no interest to pick a fight, but we will hold our ground”.

    “But trades threats are not the way to go about this,” Kallas added. “Sovereignty is not for trade.”

    It comes as text exchanges between Trump and the Norwegian prime minister were released – showing that on Sunday the US president blamed Norway for the fact he didn’t get the Nobel Peace Prize.

    In his reply – seen by the BBC – Jonas Gahr Støre explained that an independent committee, not the government of Norway, awards the prize which last October went to Venezuela’s opposition leader María Corina Machado.

    “Norway’s position on Greenland is clear. Greenland is a part of the Kingdom of Denmark, and Norway fully supports the Kingdom of Denmark on this matter,” Støre added.

    Trump also addressed the text message exchange in Monday’s interview and said: “Norway totally controls it [the Nobel Prize] despite what they say.

    “They like to say they have nothing to do with it, but they have everything to do with it.”



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