How will Trump's tariffs work? The consequences of 'Liberation Day' explained
by Kit Heren · LBCBy Kit Heren
Donald Trump imposed sweeping tariffs on Wednesday night, in a change that will disrupt global trade and economies across the world.
Listen to this article
Loading audio...
He said that he was seeking to "make America wealthy again", a twist on his MAGA catchphrase.
The US president also took aim at foreign countries, saying that the US had been "looted" and "pillaged" by countries that traded with it freely but also imposed their own tariffs.
After Mr Trump's speech, the White House issued a list of countries that will now face so-called reciprocal tariffs.
The president said: "That means they do it to us and we do it to them. Very simple, can't get any simpler than that.
"This is one of the most important days in my opinion in American history."
Expert analysis of Trump's tariff announcement
10% baseline
The UK and several other countries will face a baseline tariff of 10%. It will go into effect from Saturday, April 5.
Mr Trump described the tariff as a "declaration of economic independence".
Countries that will be hit with the baseline tariff include:
- The UK
- Australia
- New Zealand
- Brazil
- Turkey
- Singapore
- Saudi Arabia
- The UAE
- El Salvador
- Colombia
- Argentina
How has the British government reacted?
The Business Secretary said that the UK will not "hesitate to act" in response to the tariffs. Jonathan Reynolds said that the UK is "committed" to doing a deal with the US which he hopes "will mitigate the impact of what has been announced ".
Other government sources have suggested they are relieved that Britain faces relatively low tariffs.
Business groups have warned that the tariffs could be "devastating" for their members and the economy.
Instant reaction to Trump's tariff announcement
'Worst offenders' to get higher tariffs
The White House said that around 60 countries that have their own tariffs on the US, or impose other economic barriers, will be hit with higher tariffs.
These will come into effect on April 9.
Mr Trump said that the tariffs in these cases were not truly reciprocal - being instead lower than what US businesses faced exporting to these countries.
These include:
- China - 34%
- The EU - 20%
- Thailand - 36%
- Cambodia - 49%
- Taiwan - 32%
Trade experts answer your questions about Donald Trump's tariff plan
Canada and Mexico not included this time
Canada and Mexico were not included in this tariff announcement.
Both countries have already been subject to tariff announcements by Mr Trump - although these have been delayed and some exemptions negotiated.
The president has made it clear he wants Canada and Mexico to tighten up their border crossings, and has urged them to stem the flow of fentanyl into the US.
Car manufacturers get 25%
Car companies exporting to the US now face 25% tariffs. This could be a major blow for British auto manufacturers and may cost jobs.
Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, said: "These tariff costs cannot be absorbed by manufacturers, thus hitting US consumers who may face additional costs and a reduced choice of iconic British brands, whilst UK producers may have to review output in the face of constrained demand.
"Trade discussions must continue at pace, therefore, and we urge all parties to continue to negotiate and deliver solutions which support jobs, consumer demand and economic growth across both sides of the Atlantic."
Could it get worse?
Some countries are likely to impose retaliatory tariffs, leading to a trade war.
But a top US official has said that if countries try to hit back, the US could increase its tariffs.
"My advice to every country right now is, do not retaliate," US Treasury Secretary Scott Bessent said.
"Sit back, take it in, let's see how it goes. Because if you retaliate, there will be escalation. If you don't retaliate, this is the high watermark."