Asya Robins
Live reporter

US President Donald Trump warned that he would impose tariffs on China, Canada and Mexico when he won the election back in November.

Over the weekend, he took the first steps in enacting that plan, announcing a levy of 25% on Canadian and Mexican imports, as well as an additional 10% tax on Chinese goods.

This sparked a global sell-off on financial markets on Monday before an agreement between Trump and Mexican President Claudia Sheinbaum to halt levies on Mexican goods for one month brought some relief.

A few hours later, a last-minute call between Trump and Canadian Prime Minister Justin Trudeau resulted in a similar 30-day delay to taxes on Canadian goods.

But a US levy of 10% on Chinese imports has started today, which resulted in Beijing announcing retaliatory tariffs on a raft of American products.

These won't come into effect until Monday and our China correspondent Laura Bicker says this gives the parties some time to stop a spiralling tit for tat trade war.

And the next few weeks will bring clarity on the future of the US-Mexico-Canada trilateral trade bloc.

We're pausing our live coverage from London now but our colleagues in Washington DC will resume coverage on US politics with Trump set to meet Israel's Prime Minister Benjamin Netanyahu later today.

In the meantime, here are some stories from across the BBC to keep you updated:

• Trump's trade war with neighbours is delayed - what did they all get out of it?
• Trump sows uncertainty - and Xi Jinping sees an opportunity

Image source, Reuters

There were echoes of Donald Trump’s first term in office, when at 00:01 EST (05:01 GMT) this morning, the US president once again imposed tariffs on trade with China.

Mexico and Canada were also in Trump's sights, however both were granted a reprieve from 25% tariffs after promising to shore up their borders.

Here's what else has developed since:

• For now, there have been tit-for-tat exchanges between the US and China; 10% tariffs are in place on the import of Chinese goods into the US.
• China says that in response it has filed a complaint with the World Trade Organization
• Meanwhile, Chinese tariffs are also due to begin on Monday, with a 15% import tax due to be placed on US coal and liquefied natural gas. The import of cars too, will be impacted
• Despite this, our colleague Laura Bicker has more on the signs that China is in listening mode, and prepared to come to an agreement with the US
• Donald Trump signed an executive order last night to begin the process of establishing a sovereign wealth fund and says he may use tariff money to buy Chinese owned app TikTok
• China added American companies including Calvin Klein to an "unreliable entities" list, while the country's competition watchdog has launched an investigation into Google

Gabriela Pomeroy
Live reporter

Image source, Charlie Kolean

In our previous post, We heard what some residents of China think about tariffs, now let's hear from some Americans.

Charlie Kolean is a Dallas-based lobbyist who played a role as an activist on the Trump campaign, supporting the behind-the-scenes setup at Trump rallies.

"People understand this is going to be inflationary, but it will be temporary," he says.

"This is not for economic reasons; it is for national security," he tells me. "Trump sees fentanyl addiction as a major issue, and he wants China and Mexico to address it."

"I am personally happy we are taking the drug epidemic seriously. And I think China and Mexico are going to break off the fentanyl supply line from China."

Image source, Zak Smith

Zak Smith is a student in the UK, originally hailing from Detroit - a city home to the US car industry.

He disagrees with Trump's threat of tariffs, which could greatly have a significant effect on the city's economy.

"My family and friends are all concerned - the potential cost of the tariffs is alarming. Our state economy relies on the auto industry," he says. "As Americans we are supposed to be about the free market.

"This is also creating uncertainty for American consumers. We are waiting to see the worst of it."

Image source, Reuters

While we've been hearing plenty of analysis on what potential tariffs could mean for the American and Chinese economies, let's now hear the thoughts of some residents of China's largest city, Shanghai.

"I think the end result is that both sides suffer," 25-year-old master's student Lee, who only gave his surname, tells Reuters.

"Ideally, both sides should find a path of co-operation and mutual benefit. This is what we have been advocating, but whether the US is willing, depends on PresidentTrump’s thoughts."

Image source, Reuters

A tourism worker who also gave only his surname, Lu, 42, says there is no short term solution because the US has to solve its own foreign debt, which he describes as "significant".

"Raising interests rates doesn’t work, and not raising interest rates doesn’t work. So, I think if they don’t solve their fundamental problems, the trade war will continue," he says.

Image source, Reuters

A healthcare worker, 37-year-old Ophelia Zan, is concerned about the impact on small and medium manufacturers in China - declining sales, and lower wages for employees.

"Over time, this could trigger a series of chain reactions," she says.

"However, regarding China-US relations, I think they are already really bad. I don’t think they can get much worse," she adds.

US tariffs are a bigger threat to China's economy this time aroundpublished at 12:52 Greenwich Mean Time 4 February

12:52 GMT 4 February

Suranjana Tewari
Asia business reporter, in Singapore

During his first term, Donald Trump imposed 7.5-25% tariffs on China. This time, the Chinese economy is in a much more vulnerable position.

In 2018, the property market was strong - driving about a quarter of China's economic activity. Today, the real estate sector is in a severe downturn.

The finances of local governments are in bad shape - revenues have plunged and many are saddled with huge debts. Plus, an oversupply of empty homes means the property sector might never return to the driving seat of Chinese economic growth.

There are also low wages and pensions, while high youth unemployment has hit demand for goods and people just aren't spending enough money. That's driving prices down - hurting business and growth.

Tariffs will impact demand from overseas as costs are passed onto consumers - which will have a knock on effect inside China on the volume of goods being manufactured and the number of people needed to make them. And it will hamper the expansion of businesses and growth overall.

What does Google actually do in China?published at 12:30 Greenwich Mean Time 4 February

12:30 GMT 4 February

Tom Gerken
Technology reporter

Image source, EPA

Following the news earlier that China's competition watchdog had launched an investigation into Google - I've been looking into the tech company's presence in China.

You can’t actually use Google to Google in China. The tech giant’s search engine, along with Google Maps and Gmail, are all blocked in the country - as well as its video platform YouTube.

Google has still got a presence in the country, albeit a small one.

For a time this presence was growing, with an artificial intelligence (AI) lab opening in Beijing in 2017 - though this has since been discontinued.

But one thing that has remained in heavy use is the Android operating system, which is the most popular in China.

Google may own Android, but technically the system is open source, meaning anyone can create their own version of it. Most phone firms in the West don’t do this, and instead use a version which comes with lots of Google services built-in.

And of course, the versions of Android used by Chinese firms aren’t the same Google-operated Android that you see in other parts of the world - there’s no Google Play store or any branded apps.

Some outlets have reported this morning that there are businesses in China which use Google’s ad services internationally, which could potentially be the source of the Chinese government’s ire.

The BBC has approached Google for confirmation.

Laura Bicker
China correspondent, in Beijing

Image source, EPA

Donald Trump is dealing with a very different China this time around.

As the world’s factory floor, China is the lead trade partner for more than 120 countries – the US is just one of them.

Over the past two decades, China has also steadily reduced the importance of trade to its economy and ramped up domestic production. Today, imports and exports account for only about 37% of China’s GDP, compared to more than 60% in the early 2000’s, according to the Council on Foreign Relations.

The 10% tariff will sting, but Beijing may feel it can absorb the blow – for now.

The fear will be that Trump is serious about ramping up that percentage to the 60% he pledged during his campaign or that he will continue to use the threat of tariffs as a recurring diplomatic tool to hold over Chinese President Xi Jinping’s head.

If that happens, Beijing will want to be ready.

Are the 10,000 Mexican troops at border new?published at 11:47 Greenwich Mean Time 4 February

11:47 GMT 4 February

Image source, EPA

By Jake Horton

The US has paused its tariffs on Mexico after it agreed to send troops to its northern border.

Mexican President Claudia Sheinbaum said Mexico would reinforce the border with 10,000 members of its National Guard to prevent drug trafficking.

"Because of President Trump's adept ability to negotiate, we now have 10,000 Mexican troops that are going to be patrolling on the other side of the border," US defence secretary Pete Hegseth said.

According to a report published , externalby the Mexican government’s Institute of Migration in April 2024, there were almost 15,000 Mexican troops deployed at the border.

It’s unclear whether the latest deployment is additional troops. President Trump has also said the deployment will be “permanent” - but the Mexican government hasn’t commented specifically on that.

In 2019, Mexico sent 15,000 troops to the border to halt US-bound migration, external, following pressure from Trump during his first term in office.

There was also a deployment , externalof 10,000 Mexican troops at the border agreed under President Biden in 2021 in an effort to stem migration.

Not exactly a new trade war - but certainly a new phasepublished at 11:30 Greenwich Mean Time 4 February

11:30 GMT 4 February

Jonathan Josephs
Business reporter

This isn’t a new trade war yet, but it is a new front in one that’s been rumbling away in the background for years.

There have been import taxes in place on more than half the stuff the world’s two biggest economies sell each other since September 2018.

Trump began imposing them in his first term to counter what he saw as unfair Chinese trading practices. In particular, Beijing giving financial help to its companies was against the rules and restrictions on how US companies operate in China. Although Beijing disputes Trump’s assertions.

Tariffs were expanded under former President Joe Biden’s watch.

These latest tariffs mean everything China sells to the US faces tariffs and increase the amount of American goods that will attract the charges.

Despite the tariffs, trade has continued to flow which is why the head of World Trade Organization, Dr Ngozi Okonjo-Iweala, is amongst those to say it has been resilient even as the global economy has become more fragmented.

Asya Robins
Live reporter

US goods and services trade with Mexico totalled an estimated $855bn (£689bn) in 2022, according to the US government. Trade between the US and Canada reached approximately $908bn (£732bn) in the same year.

The USMCA (United States-Mexico-Canada Agreement) is a trilateral trade agreement which came into force in 2022. It replaced the Nafta (North American Free Trade Agreement) trade agreement which was signed in 1994.

Before the trilateral agreement, trade among the three countries was happening, but the agreement "kickstarted the process of synchronising supply chains," Rubi Bledsoe from the Centre for Strategic and International Studies tells the BBC, adding that they have become very integrated.

"We know that automobiles cross the US-Mexico and US-Canada border several times before they end up being fully assembled," she says by way of example.

Bledsoe says that if Trump's proposed tariffs do go ahead, this would mean a breakdown of the USMCA agreement "in its entirety".

She adds that the Trump administration seems to be more interested in pursuing bilateral trade agreements as opposed to continuing the trilateral bloc.

This also appears to be Mexican President Claudia Sheinbaum's priority, she notes.

Image source, Getty Images

President Trump's proposed 25% tariff on imports from Canada may be postponed for 30 days - but some Canadians still feel trust between the two countries has been damaged.

Our North America business correspondent Michelle Fleury is in the border city of Windsor, Ontario:

Laura Bicker
China correspondent, in Beijing

China's counter measures are limited in scope compared to Donald Trump’s levies on all Chinese goods heading to the US.

This time Beijing has been prepared with a slew of targeted measures across different parts of the US economy, from energy to individual companies.

Just minutes after Trump’s trade measures took effect, China said it would implement a 15% tariff on coal and liquefied natural gas products as well as a 10% tariff on crude oil, agricultural machinery and large-engine cars imported from the US. The tariffs would take effect next Monday.

However, the impact on the US may be limited. America is the biggest exporter of liquid natural gas globally, but China accounts for only around 2.3% of those exports.

And China’s biggest car imports are from Europe and Japan.

These calculated measures may just be an opening shot by Beijing, a way of gaining some bargaining power ahead of any talks, but there is still a risk that they mark the beginning of a bigger tit-for-tat trade war.

Dearbail Jordan
Business reporter

Jitters seemed to ease yesterday when the US, Canada and Mexico reached agreements to delay tariffs on imports to the US for a month.

But stock markets in Europe headed downwards on Tuesday, as border taxes on Chinese goods coming into the US kicked in and Beijing hit back with tariffs of its own on American products, as well as a bunch of other retaliatory measures against Washington.

In the UK, FTSE 100 index of blue chip companies ticked 0.28% lower. In France, the CAC-40 crept up a little after beginning the day in the red while in Frankfurt, the DAX index dipped.

Investors will now be watching whether US President Donald Trump and his Chinese counterpart Xi Jinping can reach a rapprochement when they talk later this week - and whether Trump follows through on his threat to hit Europe with tariffs.

Adam Goldsmith
Live reporter

To understand what impact US President Donald Trump’s new economic measures might have, we've found it useful to go back to basics - so our colleagues on the BBC's search team have drawn up a list of some of the most-asked tariff-related questions.

What are tariffs and how do they work? They are taxes charged on goods imported from other countries. A 10% US charge on goods imported from China is now in effect, meaning a product worth $1 would face an extra $0.10 charge.

What are tariffs used for? The charge is paid to the government, therefore buffing up government accounts. It’s uncertain how Trump might spend the extra cash he gets from Chinese imports, but as we reported earlier, he has hinted at using it to establish a sovereign wealth fund.

What is the point of tariffs? It depends who you ask. Firstly, they put more money into government accounts. Secondly, the threat of tariffs can be a negotiating technique - as demonstrated when Mexico and Canada agreed to bolster their borders yesterday. They can also encourage people and firms to buy domestically, rather than import.

Who pays the tariffs on imports and exports? Technically, the importer pays the charge, not the foreign company that exports them. But companies often pass higher costs onto customers. In 2018, a 50% tariff on washing machine imports caused a significant jump in prices, as our Verify team explains.

• Want to know more? Watch the below explainer from Newscast's Adam Fleming:

Moving away from China for a moment, let's take a look at what has happened between the US and Canada in the last few days.

President Donald Trump initially announced that the US would impose a 25% tax on goods from Canada over concerns about border security and fentanyl trafficking.

Canadian Prime Minister Justin Trudeau responded by announcing retaliatory tariffs against the US. He also said that less than 1% of fentanyl entering the US comes from his country.

Less than 24 hours later the two leaders reached an agreement to suspend the tariffs for 30 days, with Canada agreeing to stricter border security and taking bigger steps to address fentanyl trafficking.

But the border security measures announced by Canada on Monday aren't all new.

• In December, Canada announced C$1.3bn (£700m) in measures that included efforts to disrupt the fentanyl trade, new tools for law enforcement and enhanced co-ordination with US law enforcement, which officials have cited for weeks to show they are taking Trump's border concerns seriously
• A new element appears to be the appointment of a "fentanyl tsar" and a C$200m (£111m) intelligence directive to fight organised crime and fentanyl

With these measures in place, it remains unclear if Trump will follow through on his tariff threats once the 30-day extension ends.

Image source, Reuters

Gabriela Pomeroy
Live reporter

Image source, getty

China has added PVH, the American company which owns Calvin Klein and Tommy Hilfiger, to its "unreliable entity" list.

This is a "political tool used by the Chinese" against a symbol of American retail, says Andreas Schotter, a professor of international business at Western University in Ontario, Canada.

Beijing has been accused of labour and human rights abuses in the past - and it is now harnessing those claims and turning them back on the West, Schotter explains.

"Whether [those accusations are] accurate or not does not matter in this case. … The point is China is hitting back in the same way".

Chinese authorities "are going to go into Calvin Klein factories and look for what they consider improper conduct," Schotter says.

It will be harder for Calvin Klein to do business in China.

"This is all part of the US-driven de-coupling of the US and China," Schotter says.

Jagdip Cheema
Business reporter

It looks like the Trump administration got wind of Beijing’s plan to restrict the export of 25 critical minerals.

On Monday, the US president mentioned he wanted Ukraine to guarantee the supply of more rare earth metals in exchange for Washington’s $300bn (£241bn) support.

Some of these metals, known as "REM", are key components for many electrical products.

On Beijing’s restricted list this morning is tungsten, which is difficult to source and a crucial material for the aerospace industry.

Also on the list is tellurium, which is widely used for solar panels and molybdenum, which is vital for planes.

China says the restrictions will protect its "national security interests", knowing it’s very difficult to find a replacement for its supplies.

• Listen: Radio 4 explores the unnoticed global competition to control production of the rare earth metals in The Scramble for Rare Earths

Suranjana Tewari
Asia business reporter, in Singapore

North America is a crucial market for Japan's biggest automakers, but they source much of their components and equipment from China. Shares in Toyota, Honda and Nissan all dropped this week, as did South Korea's Kia, on news of additional tariffs.

Trump’s new levies are likely to impact e-commerce - as they include an end to a tariff exemption for packages worth less than $800 (£643).

Alibaba, Temu and Shein could be subject to duties for the small parcels and packages sent to the US from China known as "de-minimis" shipments. US shoppers may find fewer deals on Chinese platforms, and shift to the likes of Amazon.

Trump has said he wants to tax chips, so semiconductor suppliers to China like Taiwan's TSMC and South Korea's Samsung could lose out.

But China's domestic industry could benefit, as higher costs and export controls invigorate Beijing's determination to bolster its own chip manufacturing capabilities.

Experts say Asian oil refiners could also emerge as winners from US tariffs - their profit margins could be helped by higher product prices across the board.

Image source, Reuters

Gabriela Pomeroy
Live reporter

Trump says he's using tariffs not just for economic reasons, but also to "combat the scourge of fentanyl". Let's dig into that a bit.

What is the fentanyl crisis? Fentanyl is a legal painkiller, but it’s also made illegally and sold by criminal gangs. It’s a synthetic opioid much stronger than heroin. In 2022, over 70,000 Americans died from fentanyl overdoses.

What’s China’s role? US officials say chemicals used in fentanyl come from China. The White House says, external "Chinese officials have failed to take the actions" needed to stop this. China denies any knowledge of illegal drug trade.

What’s Mexico’s role? US authorities blame Mexican drug gangs for supplying fentanyl. The White House accuses, external Mexican cartels of having "an intolerable alliance with the government of Mexico," but Mexico's president called this "slander".

What’s Canada’s role? The US also says Mexican cartels are running fentanyl labs in Canada. Canada’s prime minister argues less than 1% of fentanyl entering the US comes from his country.

Michael Race
Business reporter

Image source, Reuters

More now from drinks giant Diageo on potential tariffs on Mexico and Canada.

The company’s chief financial officer Nik Jhangiani tells reporters on a call that if 25% tariffs were imposed by the US on its neighbours, it would knock off $200m (£160m) off the gross profit of the business.

However, he says the company could offset 40% of that through promotional pricing and shipping stock earlier before the tariffs were imposed.

Shipping goods across borders before potential tariffs kick is gathering pace. Yesterday, premium spirits company Luxco said it had brought forward its transatlantic shipments of Kentucky bourbons amid uncertainty over what would happen between the US, EU and the UK.

“We’re going early to minimise how any future changes in trade tariffs impact the pockets of American whiskey fans across Europe and the UK,” says Greg Mefford, managing director of international business.

Everyone appears to be in "watch this space" mode at the moment.