President Trump is expected to speak with Chinese President Xi Jinping within the next 24 hours, his spokesperson has said.

White House press secretary Karoline Leavitt made the comments to Fox News a little earlier.

As a reminder, Trump announced that the US would introduce a 10% tax on goods from China, starting from Tuesday.

In response, China said it would file a case against the measure at the World Trade Organization.

Mexico delivers a masterclass in how to handle Trump's threatspublished at 20:22 Greenwich Mean Time 3 February

20:22 GMT 3 February

Will Grant
Central America and Cuba correspondent, in Mexico City

Image source, Reuters

Throughout this trade crisis, President Claudia Sheinbaum has called for “cool heads” and “calm”.

Even on Friday, she said she was confident of a last-minute reprieve from the 25% tariffs on Mexican goods. And so it proved, following an early morning telephone call with President Trump.

Announcing the agreement soon after, she could barely wipe the smile from her face and her supporters have heralded what they see as a masterclass in how to handle Donald Trump.

Yes, she agreed to send National Guard troops to the border to focus on fentanyl-smuggling, but crucially she secured what she wanted from Trump too.

As well as the obvious – a stay on tariffs – she also got Trump to “promise” the US would do more to tackle the traffic of high-powered weapons from the US into Mexico, to prevent them from ending up in the arms of cartel gunmen.

But she also bought herself another vital commodity: time.

She now has several weeks in which to build on the points agreed in that telephone call and turn the temporary hold on tariffs into a permanent one.

White House press secretary Karoline Leavitt says the phone call between US President Donald Trump and Canadian Prime Minister Justin Trudeau is under way, according to Reuters news agency.

This is the second time the pair have spoken today. Trump described their earlier conversation as "good".

We will bring you updates as they come to light.

We're hearing some reaction now from a major autoworkers union in the US - the UAW (United Automobile, Aerospace and Agriculture Implement Workers of America) - who say they support "aggressive tariff action to protect American manufacturing jobs" as a first step towards "undoing decades of anti-worker trade policy".

They add however that they do not support using factory workers "as pawns".

"We are willing to support the Trump Administration’s use of tariffs to stop plant closures and curb the power of corporations that pit US workers against workers in other countries," the statement outlines.

"But so far, Trump’s anti-worker policy at home, including dissolving collective bargaining agreements and gutting the National Labor Relations Board, leaves American workers facing worsening wages and working conditions even while the administration takes aggressive tariff action."

The UAW continues to say that Trump should look to "renegotiate our broken trade deals" - saying there is a national emergency not around drugs or immigration but regarding a working class that has "fallen behind for generations".

In video posted to his Truth Social account Donald Trump has further addressed his deal with Mexico in the wake of new tariffs.

Speaking from the White House, he answers a reporter who asks if there is any chance China or Canada could also get out of the tariffs after the deal he struck with Mexico.

"Nobody is out," Trump replies as he praises President Claudia Sheinbaum and says Mexico has "incentives" to stop "illegal aliens" and "fentanyl".

"They've agreed to put in 10,000 soldiers permanently — like, forever."

"Other than that we have agreed to talk and consider various other things - we haven't agreed on tariffs yet and maybe we will and maybe we won't."

Bernd Debusmann Jr
Reporting from the White House

As part of today's agreement to "pause" the tariffs on Mexico, the Mexican government had promised to deploy 10,000 National Guard troops to the northern border, in part, to stop the flow of undocumented migrants to the US border.

While different in scale, this is not the first time that Mexico has cracked down on migrants headed to the US.

Last year - during the Biden administration - Mexico deployed some forces to its southern border with Guatemala and in southern Mexican cities that have become hubs for migrants, which led to a significant increase in the number of migrants intercepted before they arrived at the US border.

In January and February last year alone, about 120,000 people were detained. The vast majority remained in Mexico, with only limited deportations of about 8,000 people to Guatemala and Honduras in the same time frame.

In practice, the crackdown - which followed a December meeting between US Secretary of State Antony Blinken and Mexican officials including López Obrador - has seen Mexican security forces set up new checkpoints on roads, increase patrols and, in some cases, remove migrants from freight trains headed towards the US border.

Read more about how the Mexican military played a part in stemming the flow of migrants.

Tariffs on Mexican goods may be delayed, but there is no clear winnerpublished at 19:13 Greenwich Mean Time 3 February

19:13 GMT 3 February

Will Grant
Central America and Cuba correspondent, in Mexico City

Shortly before her morning press briefing, President Claudia Sheinbaum held a call with Donald Trump and then released an update on social media saying they had reached an agreement.

Mexico would send 10,000 troops of the National Guard to its border with the US to focus on the issue of fentanyl-trafficking, she said, while the Trump Administration had “paused” its tariffs on Mexican goods for another month.

In essence, both leaders will play this solution as a victory for their side.

From Claudia Sheinbaum’s point of view, she was able to avoid harmful 25% tariffs on Mexican products at least for the time being and also secure a commitment from Mr Trump to do more to tackle the flow of high-powered weapons south to Mexico which have armed the country’s drug cartels for years.

For his part, President Trump will be able argue that the mere threat of tariffs from Washington brought the Mexican Government to the negotiating table and brought him increased security on the Mexican side of the border as he had called for.

In truth, both leaders have given a little but – for the next few weeks – the trade dispute between the neighbours has been averted.

Jessica Murphy
Reporting from Toronto

Jim McKinnon is the president and chief executive officer of Willson International, a Canadian customs brokerage and logistics solution company.

He tells the BBC that a lot of his clients “are scrambling to get a grip on what's happening out there”.

“They're being greeted with 25% more cost in their environment that they didn't have yesterday. And there's certainly cost ramifications and cash flow ramifications,” he says.

His company helps firms navigate the customs clearance process.

He said companies are having to consider major business decisions like whether to increase prices or negotiate with their buyers.

“There's probably an awful lot of companies talking to their banks right now to be sure of their ability to absorb costs,” he says.

“I think that day one or two, there could be a lot of shipments coming toward the border that might hit a chaotic environment.”

John Ringer
Reporting from Washington DC

While Mexico and the US have reached a deal to delay Trump's planned tariffs on that country, imports from Canada could still face charges of up to 25% starting Tuesday.

Justin Trudeau says he's ready to retaliate if Trump's plan comes into effect, announcing tariffs on C$30bn (£16.6bn) of goods from the US effective 12:01 EST (05:00 GMT) 4 February.

Image source, Government of Canada

The full list of targeted goods, external is enormous, running from "live poultry, that is to say, fowls of the species Gallus domesticus, ducks, geese, turkeys and guinea fowls" to "paintings, drawings and pastels, executed entirely by hand".

At a news conference over the weekend, Trudeau warned Americans that a trade war with Canada wouldn't just hit their neighbours to the north:

Bernd Debusmann Jr
Reporting from the White House

Image source, Reuters

We've just heard from President Trump, who has just signed an executive order directing the US Treasury and Commerce secretaries to begin taking steps to create a sovereign wealth fund that could potentially come to own part of TikTok.

Billionaire media mogul Rupert Murdoch was in the room, along with Oracle co-founder Larry Ellison.

With regards to tariffs, the president said he had a "great talk with Mexico" today, adding that he believes the deployment of 10,000 troops to the US border would be permanent.

He said, however, that tariffs are not off the table during the month-long "pause" that was announced earlier today.

Trump did not say anything about any similar deal with Canada, but said he expected to have a "good conversation" with Prime Minister Justin Trudeau later today (that call is expected to take place at 15:00 local time, 20:00 GMT).

He also briefly touched on Elon Musk and Doge (the Department of Government Efficiency), saying that he will not do anything without Trump's approval and that "he reports in".

Could Canada get a last-minute reprieve?published at 18:29 Greenwich Mean Time 3 February

18:29 GMT 3 February

Nadine Yousif
Reporting from Toronto

US President Donald Trump and Mexican President Claudia Sheinbaum say they have reached a deal that will see Mexico send more troops to its shared border in the US, and in turn the US would delay the tariffs it planned to impose on Mexico for a month.

The question now becomes whether Canada can also get some sort of last-minute reprieve as well.

Trump and Canadian Prime Minister Justin Trudeau spoke on the phone this morning, but there was no indication that any sort of agreement had been reached. They are due to speak again this afternoon.

A senior Canadian official has since told the New York Times that there is little optimism a deal could be cut between Canada and the US before Tuesday, when the tariffs are set to take effect.

Dominic LeBlanc, Canada's finance minister, told CTV News much the same earlier today.

The big unknown is what type of concessions Canada needs to make to save itself from these costly tariffs.

Trump has centred his demands on border security and the curbing of fentanyl trafficking. Canada has responded by noting that less than 1% of fentanyl and illegal border crossings into the US come from Canada. It has also offered to spend an additional C$1.3bn (£719m) to secure the shared border.

But Trump has raised other concerns, including his frustration with the trade deficit between the two countries. He has also criticised Canada for not spending enough on its military.

There’s also the repeated point Trump has made that Canada should become a US state - a comment that he has notably not made in regards to Mexico.

Moving away from our question period, let's return to some new developments in the ongoing trade dispute between Canada and the US.

The New York Times is reporting that a senior Canadian government official has said that they are not optimistic that Canada would be able to get a reprieve from tariffs, similar to what we saw with Mexico earlier today.

This government official is said to be familiar with the call that happened between President Trump and Prime Minister Justin Trudeau this morning, and has added that the situation was still in flux.

A reminder that the two leaders are due to speak by phone again today at 15:00 local time (20:00 GMT).

Do tariffs work?published at 17:57 Greenwich Mean Time 3 February

17:57 GMT 3 February

Dharshini David
Chief economics correspondent

As we round out this question period, one of the big ones that we should look at trying to answer is: do tariffs works?

Tariffs are essentially a tax on imports from other countries, designed to protect against cheaper competition from elsewhere and boost businesses and jobs at home. President Trump also sees them as a substantive way of raising tax money.

However, in practice they can have detrimental effects on the well-being of both consumers and businesses - including the ones they set out to protect. For it can be shoppers who bear the bulk of those tariffs in the form of higher prices, if they're passed on, and less choice.

Meanwhile, tariffs tend to trigger retaliation from targeted countries, disadvantaging businesses who are looking to export their goods there. So ultimately, tariffs can hold back trade, growth, and indeed job creation - which is why these moves of President Trump have caused such consternation around the globe.

What is protectionism?published at 17:53 Greenwich Mean Time 3 February

17:53 GMT 3 February

Lucy Acheson
Business reporter

Analysts are warning that President Trump’s tariffs on Canada and China could harm global trade, but he has insisted they are needed to “protect” Americans and the US economy.

So, what does that mean?

Protectionism is an economic policy of restricting imports to protect domestic industries from foreign competition.

Governments can use tariffs, quotas, and subsidies to make foreign goods more expensive and harder to get.

The idea is to get consumers to buy locally, protecting jobs and boosting the national economy.

But protectionism is not without its costs: it can raise prices for consumers and can spiral into trade wars, with countries imposing counter-tariffs on imported goods.

Why is Trump imposing tariffs on Canada?published at 17:50 Greenwich Mean Time 3 February

17:50 GMT 3 February

Dharshini David
Chief economics correspondent

Posting on social media, President Trump claimed he issued the tariffs against Canada “because of the major threat of illegal aliens and deadly drugs killing our Citizens, including fentanyl”.

But there's far more to his targeting of that nation.

Canada and the US are each other's biggest trading partner, with over £400bn ($496bn) worth of goods flowing into the US from Canada in 2023.

So slapping a tax on those could - in theory - help contribute billions towards President Trump's goal of using tariffs as a lucrative form of tax revenue. But such tariffs deter sales, meaning the total would fall short of what he envisages.

And second, Canada sells more to the US than goes the other way. Such deficits are one of President Trump's pet peeves. So the tariffs are meant to penalise Canadian exporters. But, as Canada announces its own tariffs on the US in response, American exporters, too, could feel the squeeze.

President Trump has previously demonstrated that he sees tariffs as a bargaining chip - but his suggestion that Canada could be the US's 51st state has not gone down well.

How much does the UK export to the US?published at 17:46 Greenwich Mean Time 3 February

17:46 GMT 3 February

Dharshini David
Chief economics correspondent

The US remains the UK’s biggest individual trading partner, with almost £190bn ($232bn) worth of UK exports in the most recent 12 months on record.

By value, the biggest categories of goods sold represented cars, medicines, aircraft, and machinery.

However, the bulk of what Britain sells to the US is in fact services - the likes of financial services, insurance, travel and advertising.

In fact, the US accounts for more than £1 in every £4 of the UK’s services exports, and that type of trade has not been in President Trump’s sights when it comes to tariffs.

That then leads us to the question of: what does the UK import from the US?

The UK bought over £110bn ($136bn) worth of stuff from the US in the last 12 months, split pretty evenly between goods and services.

By value, the largest category of goods imported was crude and refined oil, followed by machinery, medicines and aircraft.

In terms of services, the likes of financial services, travel and technology made up the main categories.

What can the UK do about potential US tariffs?published at 17:36 Greenwich Mean Time 3 February

17:36 GMT 3 February

Henry Zeffman
Chief political correspondent

Not a great amount beyond watch and wait, especially as it is far from clear what Donald Trump intends to do and when.

Clearly, it is far from ideal for the UK government to have the US president openly musing about the possible imposition of tariffs. But the government can also take comfort, at least in relative terms, from the president making plain that he views the UK and the EU separately and that, as it stands, he likes Keir Starmer.

That latter point may give some clues to what the government will do now - try to keep Trump sweet. The new UK ambassador to the US, Lord Mandelson, is set to arrive in Washington in the next few days, hoping for the final formal sign-off from Trump to take up his post. And Starmer is likely to visit in the next few weeks for their first meeting in the Oval Office.

Should tariffs end up being imposed, then the political and economic ramifications for the UK would be significant. It would be for Starmer, Rachel Reeves and other top ministers to work out how far they would want to go in retaliation.

Does the UK have a trade surplus with the US?published at 17:32 Greenwich Mean Time 3 February

17:32 GMT 3 February

By Anthony Reuben, BBC Verify

It has been suggested that the UK is less likely to have tariffs – or taxes - imposed by President Trump on its exports to the United States because the US has a trade surplus with the UK.

A trade surplus is when a country sells more to another country, than it buys from it.

But a quirk in the trade statistics means that the US and the UK both think they have trade surpluses with each other.

The Office for National Statistics (ONS) estimates a 2023 UK trade surplus of £71.4bn while the US statistics put their own surplus at $14.5bn (£11.6bn).

The ONS reckons the main differences are in the estimates for the trade in services , externaland also points out that while the US official stats include Crown Dependencies such as Jersey, Guernsey and the Isle of Man –– the UK doesn’t.

The ONS also says that while both countries are using essentially the same reporting rules, there have been recent changes, and they have been implementing them “at different speeds”.

Do Trump's comments put pressure on the UK?published at 17:29 Greenwich Mean Time 3 February

17:29 GMT 3 February

Henry Zeffman
Chief political correspondent

The timing is very awkward. Keir Starmer is in Brussels today, the first UK prime minister to attend a summit of EU leaders since Brexit five years ago.

And yet it is even more clear this morning that President Trump loathes the EU and that - as a result of not being part of it - the UK is likely to get off lighter when it comes to sanctions.

To some, this means that it is a bad time to pursue closer trading ties with the EU. To others, it will be a sign that Starmer should be willing to go further than currently planned in re-integrating the UK’s economy with the EU’s, seeking the strength in economic numbers that comes from being part of a trading bloc.

All this underscores that 2025 will be a year of complicated diplomacy for Starmer. After Brussels today, Starmer will be in Washington within weeks and at some point this year is expected to become the first prime minister to visit China since Theresa May in 2018.

Navigating his way between all of those global behemoths will be some task.

Why is Donald Trump obsessed with trade deficits?published at 17:24 Greenwich Mean Time 3 February

17:24 GMT 3 February

Faisal Islam
Economics editor

President Trump is clearly fixated with the trade deficit, specifically the balance of buying and selling various goods between various countries and jurisdictions.

In the case of Canada, this is not the official pretext or legal power for the current set of tariffs. But the US does run a trade deficit with Canada, which the president mentions, repeatedly.

Mark Carney, who is running to replace Canadian Prime Minister Justin Trudeau as leader of the Liberal Party, and others point out that most of that is accounted for by energy exports, upon which American mid-western refineries are 100% dependent right now.

Trump’s long standing animus with the EU comes about from its substantial goods trade surplus, arising from, for example, high-end German car exports.

I put this precise point to the EU Trade Commissioner Maros Sefcovic last month. “Sure, we have a trade surplus in goods, but the US has a trade surplus in services. And on top of it, every year, 300bn euros is flowing across the Atlantic into the American companies, from our pension funds, from the saving accounts of the European citizens, because they're investing in the US. So I think that it's pretty balanced relationship”.

With the UK, the trade position is more balanced, and that was a point made last month to me by the Trade Secretary Johnny Reynolds. On some measures, the US has a surplus.

Underlying all of this is perceived unfairness that other markets are more restrictive, for instance, to US farm exports or the prices paid for US drugs or the fines placed on US tech companies.

But the bigger picture is this: all of this might be diversion.

The past weekend has taught us to take the president seriously. He wants to create a massive new tax base of foreign businesses in order to replace some of the taxes on US individuals and corporations.

In order for that to raise the sums required, no country - including the UK - will escape tariffs. Expect a universal tariff soon.