Watch: What is a price? Adam Fleming of the BBC explains
US President Donald Trump said he would overtake Canadian steel and aluminum import prices from 25% to 50% planned.
He has already imposed separate prices of 25% on other imports from Mexico and Canada, but almost immediately announced an exemption for car manufacturers, then widened this to cover other goods.
He also set up a 20% levy from Chinese products.
Canada and China retaliated with prices to their own American property, arousing fears of a world trade war.
What are the prices and how do they work?
Prices are taxes billed on goods imported from other countries.
Societies that bring foreign goods to the country pay tax to government.
As a rule, prices represent a percentage of the value of a product. A tariff of 20% on Chinese products means that a product worth $ 10 (£ 7.76) has an additional $ 2 load.
Companies can choose to transmit part or all of the cost of prices for customers.
The United States has generally billed lower prices on goods than other countries.
Trump’s new prices – and his promise to introduce other “reciprocal” samples from the goods from other countries – could lead to a sharp increase in prices that people pay for goods in the United States and in the world.
Why does Trump use prices?
Prices are a central element of Trump’s economic plans. He says that prices will stimulate American manufacturing and protect jobs, as well as increased tax revenue and economy growth.
Goods from China, Mexico and Canada represented more than 40% of imports to the United States in 2024.
But Trump accused the three countries of not doing enough to end the flow of illegal migrants and drugs such as fentanyl in the United States.
The three countries have rejected the accusations.
Fentanyl is linked to tens of thousands of overdose deaths in the United States each year.
Outgoing Canadian Prime Minister Justin Trudeau said his country was responsible for less than 1% of fentanyl in the United States, most of which come from Mexico.
What’s going on with the prices against Canada and Mexico?
Trump introduced 25% of prices on goods from American neighbors, Canada and Mexico.
These were originally to start on February 4, but were delayed by one month to allow new negotiations. The 25% prices started on March 4, with a 10% rate on Canadian energy imports.
On March 5, Trump announced a one-month pricing exemption for cars manufactured in North America which comply with the existing free trade agreement on the continent, the American-mexico-Canada (USMCA) agreement.
This agreement, which was negotiated by Trump during his first mandate, establishes rules on the quantity of car must be manufactured in each country to qualify for a franchise treatment of rights.
The Canadian and Mexican prices had aroused fears of a significant impact on the manufacture of cars.
Component parts generally cross the American, Mexican and Canadian borders several times before a vehicle was completely assembled.
The actions of the head of American car manufacturers increased after the announcement.
On March 6, Trump expanded the price exemption to include other goods sent under the USMCA.
The articles currently covered by PACT rules include televisions, air conditioners, lawyers and beef, according to the analysis of the Trade Partnership Worldwide.
Trump has also reduced prices on the potash – a key ingredient for fertilizers used by American farmers – from 25% to 10%.
A White House official said that around 50% of American imports in Mexico and 62% of Canada could still face prices, although these figures can change.
How did Canada respond to American prices?
How did Mexico respond to American prices?
Mexico has also delayed reprisal prices on American goods during the initial break of one month.
President Claudia Sheinbaum urged Mexicans to “stay calm” on Trump, insisting that “the coole heads prevail”.
She also agreed to deploy 10,000 soldiers on the American-Mexican border to help fight smuggling.
Speaking after the prices entered into force on March 4, she declared that the American decision had “no justification” and promised to respond with “tariff and non -tariff measures”.
However, before they were stated, Trump announced the concessions for car manufacturers and other goods, which she welcomed.
While Trump was very critical of his Canadian counterpart Trudeau, he congratulated Sheinbaum, writing on his social media site, Truth social, that “our relationship was very good and that we work hard, together, on the border”.
How will steel and aluminum prices work?
The United States imports more steel than any other country – and Canada, Brazil and Mexico are its three main suppliers.
Canada is also the largest aluminum supplier in the United States, providing almost 60% of the amount imported.
When Trump first announced that a 25% rate on steel and aluminum imports would start on March 12, he said there would be no exceptions.
When he announced that this tax would be doubled for metals from Canada on March 11, he said that it was because of the decision of this country to invoice more to American energy customers.
Writing on Truth Social, he said: “On the basis of Ontario, Canada, placing a 25% rate on” electricity “in the United States, I asked my trade secretary to add an additional 25% price.”
American companies that use steel and aluminum to make products warned that prices could increase their prices.
Trump had previously announced 25% prices on steel and 10% on aluminum in 2018, during his first mandate as president.
However, he then negotiated exceptions for many countries, including Australia, Canada and Mexico.
Despite these previous exemptions, the prices increased the average price of steel and aluminum in the United States by 2.4% and 1.6% respectively, according to the US Commerce Commission.
What’s going on with prices against China?
Fees of 10% on all goods imported from China began on February 4.
Trump later said that expeditions worth less than $ 800 would be exempt.
On February 10, China responded with its own prices, including a 10 to 15% tax on certain American agricultural goods.
Beijing has also targeted various American defense, defense and technology companies by adding them to an “unreliable list of entities” and by imposing export controls.
The 10% levy doubled at 20% on March 4.
China has urged the United States to regain dialogue with Beijing as soon as possible.
“If the United States … persist in carrying out a pricing war, a trade war or any other type of war, the Chinese part combata to the end,” warned the spokesman for the Ministry of Foreign Affairs, Lin Jian.
What products will be allocated and will prices increase?
All Chinese goods worth more than $ 800 are covered by the tariff of 20%.
The non -exempt goods imported from Mexican and Canada are subject to a 25%levy.
Canadian energy exports to the United States are faced with a 10%rate, which could affect a wide range of companies.
Steel and aluminum imports from Canada will be taxed at 50%, while those of the rest of the world will be taxed at 25%.
The American tariffs on washing machines imported between 2018 and 2023 increased the price of laundry equipment by 34%, according to official statistics. Prices have dropped once the prices have expired.
Many economists have warned that the last series of Trump prices could cause a wider trade war that could increase prices more generally.
Will the United Kingdom and Europe have to pay prices?
Trump previously told the BBC that the United Kingdom was “offline”, but suggested that a solution could be “developed”.
The United Kingdom exports pharmaceuticals, cars and scientific instruments to the United States.
Affairs Secretary Jonathan Reynolds said the United Kingdom should be excluded from prices because it buys more from the United States than it sells.
Speaking in Parliament after the announcement of steel and aluminum prices, the Minister of Trade, Douglas Alexander, promised a “cool and clear” response.
At his meeting of the cabinet on February 26, Trump said that he would announce “very soon the sanctions on EU products.
“It will be 25% in general and it will be on cars and all other things,” he added.
The United States had a trade deficit of $ 213 billion with the EU in 2024 – something that Trump previously described as “an atrocity”.
In response, the European Commission said it would react “firmly and immediately against unjustified prices”.
US companies Harley Davidson and Jack Daniel have already faced EU prices.
