Image source, Getty Images

Trump has repeatedly linked his tariff policy to fentanyl, a deadly synthetic painkiller, getting into the US from Canada, Mexico and China.

“The fentanyl coming through Canada is massive,” Trump recently said.

There is an opioid overdose epidemic in the US and Canada, driven in part by the availability of fentanyl.

There has been a slight decrease in opioid deaths in recent months, but the epidemic claims around 80,000 lives a year in North America.

Both the northern and southern US borders have reported drug seizures, though amounts at the border with Canada are considerably lower than those with Mexico, according to official data.

US border agents seized 43lbs (19.5kg) of fentanyl at the northern border between October 2023 and last September, compared to more than 21,000lbs at the southern border.

Still, while less fentanyl crosses from Canada, recent reports from Canadian intelligence agencies suggest there is a growing number of organised crime groups manufacturing that and other drugs in the country.

Canadian law enforcement has reported fentanyl originating from Mexican organised crime groups in the Canadian drug supply, though the, external , external“magnitude, external and nature” of the operation isn’t clear., external

Trump has discussed tariffs as a way to protect US businesses and raise money for the government. But he also sees them as a way to turn America’s economic power into a tool he can use for leverage over governments in other countries.

Nations who depend on buyers in the world’s largest economy are most vulnerable to such threats - which is one reason why Trump's targets so often seem to be close allies of the US.

Take Colombia, for example, a close ally of the US in Latin America. President Gustavo Petro said he would not accept citizens deported from America. Trump responded with a 25% tariff on all US imports of Colombia goods and threatened to raise it to 50% in a week. Colombia backed down.

With Canada and Mexico, Trump has tied his threats to issues of immigration and drug trafficking.

But there has been a lot of debate about the details of the tariff plans - how far-ranging they might be in terms of products and how quickly they might come into effect.

It may take some time before the full strategy becomes clear.

Dharshini David
Chief economics correspondent

Image source, Getty Images

What could a 25% tariff on Canadian and Mexican imports and a 10% tax on China mean for American households?

Canada and Mexico make up almost 30% of the goods that America brings in but much of the products US consumers buy are home-sourced.

If the amount of these imports sold doesn't change and those tariffs are passed on in full then the average level of American consumer prices would rise but just by between 0.5% and 0.7%.

The tariffs on Chinese imports would add less than 0.1% to shoppers’ prices.

It’s not huge, but some increases could be concentrated in very visible areas. For example, 80% of vegetables imported into the US comes from Mexico or Canada, while half of wheat products or meat are also bought in.

Of course, the shock could be far less if the whole tariff isn’t passed on to the average shopper. For example, with previous tariffs on Chinese goods much was absorbed along the supply chain or if wholesalers sourced goods from elsewhere.

Natalie Sherman
New York business reporter

I've been speaking to Yuan Ji, who is the co-founder of Erstwhile Mezcal, a small Brooklyn-based importer of mezcal and agave spirits.

As the tariff talk was bubbling last year, she decided to bring in about 30% of the bottles she expects to sell this year ahead of schedule, hoping to avoid having to raise prices on her customers in the US.

“In an ideal world, I would bring in enough to last me a year or more, but the reality is, we don’t have that much cash on hand,” she said.

“For small businesses like ourselves, it’s stressful,” she said.

Suranjana Tewari
Asia business reporter

Thousands of Asian companies including the likes of Nissan, Samsung, Honda and Foxconn moved their supply chains to Mexico and Canada in the wake of pandemic disruptions and increasing political tensions between the US and China.

At the time, it was dubbed “friendshoring”.

Today, they are bracing for the impact of trade tensions once again.

Many of them will be considering moving production, this time to the US to avoid tariffs.

But that comes with its own challenges. American workers are more expensive than Mexican workers, for example, and the US is unpredictable as an investment destination as Trump settles into the White House.

China remains the most efficient place to source tools and equipment from. Asian brands may have to contend with added duties on components they import from China too, if Trump stands by his proposed tariffs on Beijing.

Natalie Sherman
New York business reporter

Image source, Fred Sanchez/BBC

As the world braces for a formal announcement from President Trump, for small businesses it's an equally stressful time.

Bad Hombre Importing, a small California-based importer of Mexican agave-based spirits like Agua del Sol, has been working on deals to expand.

The tariffs mean founder Fred Sanchez is contemplating selling off his stock of liquor and shutting down, at least temporarily, instead.

“25% is just not something that we can realistically pass onto the consumer,” the 39-year-old says.

Sanchez believes Trump’s announcement is a kind of negotiating tactic - but no matter what happens in the end to the tariffs, he says it is already hurting his business.

“I have these pending deals in Illinois and New York and everyone is just holding their breath - they’re hesitating,” he says.

“The threat is creating uncertainty in the market and we’re not seeing the kind of investment we need to grow.”

Dearbail Jordan
Business reporter

If there is one thing that financial markets hate more than almost anything else, it’s uncertainty.

And trade wars create a lot of uncertainty.

So, how do they start?

Very simply, if the US decides to impose tariffs on goods that it buys from, for example, Canada then Ottawa can retaliate by putting border taxes on American products - it’s a “tit-for-tat” move.

It means trade between countries is disrupted which, in turn, affects global economic growth. This is especially true if the world’s two biggest economies – the US and China – slap tariffs on each other.

Tariffs can also push up inflation. If that happens, the central banks which set interest rates could decide to hold or even raise borrowing costs should inflation gather pace.

Financial markets that might have been expecting a number of interest rate cuts would face uncertainty over which way borrowing costs could go.

China has chosen its words carefully when it comes to potential tariffs by the US but has said it is "firmly committed to safeguarding national interests".

A spokesperson for Beijing's embassy in Washington says: "There is no winner in a trade war or tariff war, which serves the interests of neither side nor the world."

Image source, AFP

As the world waits to see if the US imposes a new raft of tariffs, US President Donald Trump has been playing golf in Florida's West Palm Beach, near his private Mar-a-Lago estate, this morning.

Canadian media is reporting that the Canadian government has received advanced notice of the plan to impose tariffs, with CBC reporting it expects the announcement to be made official this afternoon.

But we are still waiting to hear from Trump's administration.

Canadian public broadcaster CBC is reporting that US tariffs on imports from Canada will come into effect from Tuesday, 4 February.

Citing a senior Canadian official who shared details of Trump's plan with CBC, the news organisation says it includes 25% tariffs on most goods coming from Canada into the US, along with 10% tariffs on Canadian energy products.

Canadian Prime Minister Justin Trudeau is expected to make an announcement at 18:00 local time (23:00 GMT), according to sources who spoke to CBC.

We're still waiting for official word from the White House. Stick with us for the latest.

The US National Economic Council director Kevin Hassett says that tariffs are just one part of Trump's overall strategies to boost revenue.

He recently told Fox Business: "When the people who are trying to cause panic over President Trump's trade policy simulate what it's going to do, they don't account for all the other policies. So President Trump is [saying] 'drill, baby, drill' and deregulate and tax cuts and reduce spending.

"If you look at tariffs as part of an overall strategy you're going to see, as President Trump says, a golden age and it is going to be the biggest supply-side reform that America has ever seen."

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 US company that imports the goods, not the foreign company that exports them.

The question of where the final "economic" burden of tariffs falls, as opposed to the upfront bill, is more complicated.

If the US importing firm passes on the cost of the tariff to the person buying the product in the US in the form of higher retail prices, it would be the American consumer who bears the economic burden.

If the US importing firm absorbs the cost of the tariff itself and doesn’t pass it on, then that firm is said to bear the economic burden in the form of lower profits than it would otherwise have enjoyed.

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.

Read more about the effect of tariffs on US consumers here.

Image source, Reuters

Let’s take a quick look back now at events from last month - when tariff threats against Colombia were dispelled after the Colombian government agreed to allow US military flights carrying deported migrants to land.

On Sunday, President Gustavo Petro stopped two military planes carrying Colombians deported from the US from landing.

As a response, posting on his social platform Truth Social, Trump announced “emergency 25% tariffs” on all goods - to be raised to 50% “in one week”.

Petro, in a post that remains pinned at the top of his X account, said they would in turn retaliate by imposing their own tariffs.

A statement later released by White House Press Secretary Karoline Leavitt suggested Colombia had conceded to Trump’s terms.

"Today’s events make clear to the world that America is respected again," the statement read, detailing that the drafted tariffs and sanctions would be "held in reserve".

Colombian Foreign Minister Luis Gilberto Murillo announced that the two countries had "overcome the impasse".

For more on this, you can read our story from the time.

Natalie Sherman
New York business reporter

Image source, Doug Price

Nicolas Palazzi, the founder of Brooklyn-based PM Spirits, imports around 20% of the spirits it sells from Mexico.

A 25% tax on the bottles of mezcal, tequila and rum he brings in will push up prices and likely lead to a drop in sales among his customers.

Palazzi says his suppliers in Mexico are nervous, many of whom are small, family-owned businesses that may not survive if tariffs are prolonged.

“Is it going to be good for business? No," he tells the BBC. "Are sales going to slow down? Yes.”

Uncertainty is high.“Is it for a day, is it a political flex or is it something that will last for four years?” he asks, adding that he will watch to see if President Donald Trump widens tariffs to other countries.

Our strategy is roll-with-the-punches," he says. "Wait and see and adapt to whatever craziness is going to unfold."

Jonathan Josephs
BBC business reporter

As we wait for an expected announcement on tariffs, it's worth remembering that when it comes to US-China trade, Trump is not the only reason the relationship is under strain.

Yes, he kicked things off when he added tariffs on washing machines and solar panels a year into his first term and then steadily imposed more border taxes.

However, under Joe Biden’s watch, the US added even more tariffs, as well as other trade restrictions.

There was a big spate of tariffs in May, which were designed to make it more difficult and expensive for China to sell its electric vehicles, solar panels, computer chips and more in the US.

It’s a demonstration that both sides of the US political divide, Republicans and Democrats, support a tough line on China over their perceptions that it is unfairly trying to dominate certain industries. Beijing, of course, denies that’s the case.

The clock is ticking on tariffspublished at 16:16 Greenwich Mean Time 1 February

16:16 GMT 1 February

Michelle Fleury
BBC World News Correspondent

While we're waiting to find out if Donald Trump's tariff talk is more than just talk, a couple of reminders:

First, until there is an official implementation document outlining the timing and scope of tariffs and exclusions, everything else is bluster. Social media posts and statements don't count.

That being said, the uncertainty is already bad enough. It's creating chaos for businesses. Companies are already putting off investment decisions and reconsidering their global supply chains due to concerns about trade disruptions.

The economic damage of threats alone aren't substantial. But they're also not insignificant.

Both Canada and Mexico have previously said they would respond to any imposed tariffs with measures of their own.

They’ve also sought to reassure Trump about work under way to address border concerns. That includes Canada pledging more than C$1bn ($690m; £560m) to boost security at its shared border.

Image source, Reuters

On Friday, Mexican President Claudia Sheinbaum said the country was “prepared” but underlined they would act “with a cool head,” the Reuters news agency reported.

"We will always defend the dignity of our people, respect for our sovereignty and a dialogue as equals without subordination,” she added.

Image source, Reuters

Outgoing Canadian Prime Minister Justin Trudeau posted on X yesterday that Canada is "ready" with a "forceful and immediate response".

"No one - on either side of the border - wants to see American tariffs on Canadian goods," he said - following a meeting with the Canada-US Council.

Good morning - over the next few hours we will be looking at a major announcement where President Donald Trump is expected to impose tariffs on Canada, Mexico and China.

The US president argues that such import taxes will boost the economy and leverage American power, but many analysts warn a trade war may stoke inflation in the US.

The White House said on Friday that tariffs of 25% will be imposed on Mexico, 25% on Canada and 10% on China.

Trump's press secretary said the duties would be part of the bid to tackle immigration and the quantity of fentanyl, a potent drug, crossing US borders.

Trump said on Friday that Canadian oil would be hit with lower tariffs of 10%, which could take effect later, on 18 February.

The president also said he planned to impose tariffs on the European Union in the future, accusing the bloc of not treating the US well.

We plan to bring you the latest developments, analysis and reaction here in this page so make sure to keep checking in with us.