Nomia Iqbal
North America correspondent

The UK is "out of line" in its trade with the US but the situation can be "worked out", President Donald Trump says.

Asked by the BBC if he would target the UK with tariffs while arriving into Maryland from Florida, the US leader says: "We'll see what happens, it'll happen."

Pressed further, he goes back on himself, saying "it might happen", adding that his real concern is trade with the European Union. "It will definitely happen with the European Union," he says.

He goes onto say that “the UK is out of line. But I'm sure that one, I think that one, can be worked out."

US President Donald Trump says he will speak to Canada and Mexico's leaders on Monday about the tariffs he is imposing on his two biggest trading partners - due to come into effect at midnight on Tuesday.

On Saturday, Trump announced import taxes of 25% on Canadian and Mexican goods, with Canadian energy taxed at a lower rate of 10%.

Canada and Mexico have both announced retaliatory tariffs of 25% on US goods.

Suranjana Tewari
Asia business reporter

Around 90% of auto exports from Mexico and Canada go to the US, according to the Mexican Automotive Manufacturers' Association and the Canadian Vehicle Manufacturers' Association.

And so Asian car companies with production in Mexico in particular have been warning against Trump’s tariffs. The cost of finished cars will rise, but tariffs may also raise costs for automakers through the parts supply chain.

Japan’s Honda Motor sends 80% of Mexican output to the US market. On 6 November, the auto giant warned that it would have to consider shifting production, if the US imposed permanent tariffs on Mexican imports.

Mazda exported around 120,000 vehicles from Mexico to the United States in 2023, but has said it may reconsider further investments if tariffs are imposed.

In a recent earnings call, South Korea’s Kia said it would have to consider a new destination for 120,000 K4 sedans it planned to make in Mexico in 2025 for shipment to the US.

Japan’s Toyota and Nissan, and South Korea’s Hyundai also have production in Mexico, and ship thousands of vehicles to the US every year. They’re likely to have to review their production and strategies, but are thought to be less dependent on their Mexican factories than other automakers.

Tariffs: How they work and the impact on pricespublished at 00:03 Greenwich Mean Time 3 February

00:03 GMT 3 February

In practical terms, a tariff is a domestic tax levied on goods as they enter the country, proportional to the value of the import.

So a car imported to the US with a value of $50,000 (£38,000) subject to a 25% tariff, would face a $12,500 charge.

The charge is physically paid by the domestic company that imports the goods, not the foreign company that exports them.

So, in that sense, it is a straightforward tax paid by domestic US firms to the US government.

If the US importing firm passes on the cost of the tariff to the person buying the product in the US, the consumer sees higher retail prices.

If the US importing firm absorbs the cost of the tariff itself and doesn’t pass it on, then that firm faces lower profits.

Alternatively, it is possible that foreign exporters might have to lower their wholesale prices by the value of the tariff in order to retain their US customers.

All three scenarios are theoretically possible.

But economic studies of the impact of the new tariffs, external that Trump imposed in his first term of office between 2017 and 2020 suggest most of the economic burden was ultimately borne by US consumers.

Image source, Getty Images

As we reported a little earlier, Canadians have been showing their displeasure at the incoming Trump-imposed tariffs by booing the US national anthem at sporting events over the weekend.

Another such incident has happened this evening as Toronto Raptors fans showed up to support the lone Canadian franchise in the National Basketball Association during a match against the Los Angeles clippers in Toronto.

After cheering on a 15-year-old singer as she entered to sing the national anthems, the crowd booed while she performed The Star-Spangled Banner only to then erupt into cheers and applause as the Canadian national anthem, O Canada, played next.

Local resident Joseph Chua, who attended the game, tells the Associated Press news agency he'll be feeling the impact of the tariff "pretty directly".

"Usually I will stand. I’ve always stood during both anthems. I’ve taken my hat off to show respect to the American national anthem, but today we’re feeling a little bitter about things," he adds.

Bernd Debusmann Jr
Reporting from the White House

Image source, Bernd Debusmann Jr/BBC News

President Donald Trump is expected to arrive back at the White House from Mar-a-Lago later tonight.

There's extra heavy security here this evening, which I'm told is being put up ahead of Israeli Prime Minister Benjamin Netanyahu's visit to the White House on Tuesday.

On Pennsylvania Avenue, two large dump trucks have been parked in front of the entrance to the White House, a common sight ahead of large security events in the US Capitol. As I walked in, a small drone was hovering overhead.

At Blair House - where foreign dignitaries usually stay on official visits - a large white tent has been placed in front of the doorway, and an Israeli flag is now flying on the building.

It's otherwise quiet here at the moment. But it's almost certain that the president's arrival back at the White House will be attended by dozens of reporters, hoping to ask questions about the tariffs.

Stay with us for more updates.

Image source, Bernd Debusmann Jr/BBC News

Ending an era of free trade between Mexico and Canada isn't the only thing Trump's administration has done to shake things up in the past few days.

• It has given billionaire Elon Musk's deputies access to the federal payments system that controls the flow of trillions of dollars in government funds every year
• A stand-off involving Musk's team has also taken place at the US Agency for International Development (USAID), with two top security chiefs placed on leave after they refused to turn over classified materials in restricted areas to members of the department of government efficiency (Doge), US media report
• Trump's administration has also removed references to LGBT health, and information on certain vaccines from federal websites, including top public health agencies - it followed a Wednesday memo instructing agencies to end all "programs that use taxpayer money to promote gender ideology" and disable related information from websites by Friday afternoon
• And President Trump has claimed that China is running the Panama Canal and that Panama has "broken" a promise to remain neutral in allowing it to do so - read our State Department Correspondent Tom Bateman's analysis here

Jonathan Josephs
BBC business reporter

Image source, Getty Images

We’ll find out what stock markets make of these tariffs when they open. The first major market to open will be Tokyo, in Japan on Monday at 09:00 local time (00:00 GMT).

But it's likely it won't be good news. A big reason for that is that tariffs are seen as inflationary. If goods cost more, businesses are likely to sell fewer of them, which means less profits for their owners - the shareholders.

However, some of Donald Trump's economic advisers point out his other economic policies, such as trying to cut energy prices, might counter some of that inflation.

As share prices are an indication of how investors think a company will do in future, anything that's detrimental to future profits is seen as a negative.

That negativity tends to be contagious, so if Asia's markets start the week badly that is likely to spread to Europe and then the US when their Monday mornings arrive.

Image source, EPA

Claudia Sheinbaum says she'll share details of Mexico's response to the tariffs in her daily morning briefing tomorrow.

In a video shared on X, the Mexican president insists her country "does not want confrontation" but warns she is "not lacking courage because I have a people supporting me and here we are not alone, neither you nor us".

Sheinbaum also pushes responsibility for the fentanyl crisis back on the US as she rejects suggestions that the Mexican government has an “intolerable alliance” with the drug cartels.

"We categorically reject the slander made by the White House (accusing) the government of Mexico of having alliances with criminal organizations, as well as any interventionist intention on our territory. Sovereignty is not negotiable."

• As a reminder, the US president cited "illegal aliens and drugs" as the driving factors behind the new tariffs

The United Auto Workers (UAW) trade union supports the "aggressive tariff action" announced by US President Donald Trump, says the body's president.

In a statement shared on X, Shawn Fain says: "The UAW supports aggressive tariff action to protect American manufacturing jobs as a good first step to undoing decades of anti-worker trade policy."

The trade union chief added that the organisation did not, however, support other policies that have been announced including what he use of "factory workers as pawns in a fight over immigration or drug policy."

In the statement, Fain said that Trump had so far outlined "anti-worker" policies which he claimed left workers, "facing worsening wages and worsening conditions".

Fain also called for the United States–Mexico–Canada Agreement to be renegotiated alongside and tariff action.

Image source, Getty Images

Republican Senator Lindsey Graham says Trump's tariffs are "designed to bring about change, and if the change comes, they will probably go away".

Senator Graham says 3000 Americans die every two weeks from fentanyl poisoning, which he says originates in China, and "11 million illegals" are coming across the Mexican border,

"These tariffs are designed to get these countries to change their behaviour," he tells Fox News.

"If you want tariffs to go away Mexico and China, stop poisoning Americans, stop sending fentanyl into America," he says.

Senator Graham says if Mexico wants a better relationship with the US, it should "do [its] part on the other side of the border". He adds that he appreciates what Canada is doing to their northern border.

Rubio issues toughest language yet in US-Panama stand offpublished at 20:41 Greenwich Mean Time 2 February

20:41 GMT 2 February

Tom Bateman
Reporting from Panama City

Image source, Reuters

US Secretary of State Marco Rubio’s statement after meeting Panama’s President José Raúl Mulino amounts to an ultimatum.

It's the toughest diplomatic language yet in a standoff in which the US is warning it and other Latin American nations against accepting Chinese investment.

He said US President Donald Trump had determined that China’s “influence and control” over the canal is a threat to the waterway and a violation of a decades old treaty between Panama and the US.

He said absent “immediate changes” the US would take “measures necessary” to protect its rights under the treaty.

To many Panamanians, who have vivid memories of the 1989 US invasion of Panama, this will likely feel like a sharp escalation of the standoff sparked by Trump’s vow to retake the canal.

Rubio and Mulino also appeared to emerge from their two hour meeting with different interpretations of it.

Mulino told reporters he did not see a serious threat of US military force to seize the canal, saying he had proposed technical-level talks with the US to address Trump’s concerns about Chinese influence.

As President Donald Trump increases pressure on Canada, Mexico and China with his announcement of tariffs on all three countries, his secretary of state has been engaging in another trade-related dispute during his first foreign trip since starting the job.

While stopping in Panama to meet its president, Marco Rubio has warned the Central American nation that the US will take action unless it makes "immediate changes" to the running of the Panama Canal, a key trade route, accusing it of violating a treaty that fully handed it over from the US to Panama.

President Trump has claimed that China is running the Panama Canal and that Panama has "broken" a promise to remain neutral in allowing it to do so. Both Panama City and Beijing have denied the claim. Trump has threatened to take it back by force.

Image source, Getty Images

The fallout from President Trump's latest tariff action has spilled out onto the ice rink.

Canadian hockey fans were heard booing the US national anthem as it played ahead of a game between local team, the Ottawa Senators and visiting American team, the Minnesota Wild, on Saturday night, just a few hours after Trump's announcement.

The boos and jeers came amidst an announcement from Trump that a 25% tariff on imports from Canada would be implemented, beginning this Tuesday.

Canada's Prime Minister Justin Trudeau has since responded to the executive order, saying that Canada will introduce its own tariffs in retaliation.

A little earlier, we heard from Trump's former secretary of state - who defended his decision to impose tariffs on Canada, Mexico and China.

Speaking to Fox News Sunday, Mike Pompeo dismissed concerns about the potential impact of the move on prices, saying talks of inflation are "likely overstated".

"Some of this will end up being absorbed by the producers," Pompeo said.

BBC Monitoring

Image source, EPA

As we have been reporting, Mexican president Claudia Sheinbaum "categorically" rejected Trump's accusation that Mexican drug traffickers are "afforded safe havens" by its government.

Trump's characterisation of the Mexican government as a "narco ally" has revived the debate in Mexico over security policies. It's also made the country question whether the government is doing enough to crack down on the cartels and root out cartel-related corruption.

Some commentators argued Sheinbaum's administration should seize the opportunity to declare all-out war on the cartels, working with the US.

Others saw Trump's tariffs as part of a wider strategy by him to "contain China from Mexico", seeking to put a brake on China's growing investment and presence in Mexico and to halt the supply of Chinese precursor chemicals for fentanyl production by the Mexican cartels.

The debate in Mexico triggered by Trump's move also raged on social media: while many agreed that all sides stood to lose from a tariff war, there were also calls for a "boycott" by Mexicans of US brands, goods and companies.

Natalie Sherman
New York business reporter

Image source, Bad Hombre Importing

Fred Sanchez has spent years pushing to expand his business, Bad Hombre Importing, a small California-based importer and distributor of Mexican agave-based spirits like Agua del Sol, and was recently working on deals in New York and Illinois.

But his potential partners started hesitating as Trump's tariff talk ramped up last year.

Now, instead of expanding, he is contemplating selling off his stock of liquor and possibly shutting down.

He says he had little capacity to absorb the jump in costs and saw little scope for raising prices in the current economy.

"25% is just not something that we can realistically pass onto the consumer," he said.

Sanchez says he believed that Trump might be using tariffs as a negotiating tactic, and the tax could be short-lived. Still, for his business, damage is already done.

Jonathan Josephs
BBC business reporter

“Instead of taxing our citizens to enrich other countries, we will tariff and tax foreign countries to enrich our citizens."

So said Donald Trump in his inaugural address on 20 January - and it seems these tariffs might be a first step towards that ambition.

And there is an echo of history to the idea too. Before the First World War about half of the US government’s income came from tariffs, now its less than 2%.

But after a decisive election in 1912 they were steadily cut with the money replaced by income tax.

Over the last century an erosion of taxes on trade has coincided with unprecedented global economic growth but now President Trump wants to raise tariffs and cut income taxes for American individuals and companies.

Trump says it will be worth it despite plenty of warnings of economic pain at a time when the US has been a bright spot amid global struggles. The impact remains to be seen.

Image source, Reuters

Canada's Finance Minister Dominic LeBlanc says it's unlikely the country can avoid Trump's additional tariffs by Tuesday - when they're expected to begin - but says there could be renegotiation in March.

Speaking to Canadian TV network CTV, he says: "My conversations with (US. Commerce Secretary nominee) Howard Lutnick and others in the administration tell me that perhaps in March there’s a window again."

"But most of this is so unpredictable," the finance minister adds.

Canada has historically been a strong ally to the US, and there's been a free trade agreement in place since 1994.

During Trump's first term in office, he slapped 10% tariffs on Canadian aluminium products and 25% tariffs on Canadian steel, citing national security concerns.

Ottawa retaliated by imposing tariffs on select goods, which were chosen to send a political message to Trump and his allies.

It put levies on Florida orange juice, and whiskey and bourbon from Tennessee and Kentucky - the latter being the home of then-Republican Senate Leader Mitch McConnell.

Both countries ended up agreeing to lift the tariffs a year later.

Former President Joe Biden took a more relaxed approach, but had a part to play in the long-standing issue over softwood lumber tariffs.

He raised tariffs on imports of Canadian softwood lumber products from the rate of 8.05% to 14.54%.