Faisal Islam
Economics editor

All the chips have been thrown up in the air by the American actions. All assumptions about how global trade functions will have to change.

Some of the seasoned market observers I’ve spoken to suggest that even the sharp falls we saw in the US markets yesterday are underpinned by the idea that this full tariff package won’t actually happen.

But if it does, it raises serious questions about whether the US government’s approach is undermining the strategies of some of America’s biggest blue-chip businesses.

Their current supply chain strategies involve finding the most cost-effective places in the world to make their goods. Now, they’re being told to “make American”.

There’s another factor here. Most of the world’s trade doesn’t happen through America. I've been struck by a lot of the comments from around the world – with many nations not wanting to be seen to give in to what they see as coercion from the US.

We’ve already seen the Canadians try to join forces with the EU. Some of Trump’s proxies on social media are saying world leaders should strike a deal with the US president now – get to the front of the queue – because they’re worried, I think, about a co-ordinated response.

Image source, White House

As we mentioned earlier, US President Donald Trump spoke to reporters on board Air Force One yesterday after announcing new tariffs.

Let’s recap what he said:

• Trump likened the tariffs to an operation, saying the patient was "very sick" but the operation was now over
• He said the US economy would "boom" and that trillions of dollars had already been committed
• He added he’d be open to deals with other countries if the offers were "phenomenal"
• "Every country is calling us," he said, adding the US had put itself in the "drivers seat"

How did the US work out the tariff numbers?published at 10:15 British Summer Time 4 April

10:15 BST 4 April

Image source, Reuters

If you scan across Donald Trump’s tariff chart, you'll see that the value in the second column equals roughly half of the number in the first column for most countries. There's a reason for that.

The two columns represent:

1. Tariffs that countries supposedly charge the US
2. Tariffs the US will impose on other countries

Initially, it was assumed that the figures were based on existing tariffs plus other trade barriers (like regulations and licensing rules) which make trade harder.

But, the White House has now published its official methodology, and it turns out there is a simple equation behind it.

The calculations are based on a country’s goods trade deficit with the US. In other words, how much more the US imports than it exports. This number is then divided by the total value of imports from that country.

Let's use China as an example: The US buys more goods from China than it sells to them - there is a goods deficit of $295bn and the total amount of goods it buys from China is $440bn.

Then, we find the percentage difference between those two numbers, which = 67% - that's the number which appears in the first column of Trump’s chart.

And to work out column two - the tariff the US wishes to impose - you simply divide that number by two.

So in China’s case, the result is 34, and there you have the tariff.

• How were Donald Trump's tariffs calculated?

Ottie Mitchell and Tiffanie Turnbull
BBC News, Sydney

Image source, PA Media

Two tiny, remote Antarctic outposts home to penguins and seals have also ended up on the list for Trump’s new tariffs.

Heard and McDonald Islands – a territory about 4,000km (2,485 miles) south-west of Australia – can only be reached by a week-long boat trip from Perth, and haven’t seen human visitors in almost a decade.

“It just shows and exemplifies the fact that nowhere on Earth is safe from this,” Australian Prime Minister Anthony Albanese said on Thursday.

Read more about how an island of penguins found itself on Trump’s tariff list.

Image source, Annelise Rees

Image source, Getty Images

Some Canadians may be angry about Trump's policy, but others are finding it amusing.

One of the targets of Trump’s tariffs is Norfolk Island – a tiny Australian territory with about 2,200 residents.

The island’s been hit with a 29% tariff.

Locals say the economy relies on tourism and they don’t export anything to the US – so the tariff has become something of a running joke.

“Everyone's laughing about it,” Gye Duncan, a former resident, tells Reuters news agency. “They're either laughing about it or confused why because there's no real reason, or no logical reason why he (Trump) would do that.”

People on the island are hoping the sudden international attention will give them a much-needed publicity boost and attract more visitors to the rugged volcanic island in the southern Pacific.

Robin Levinson King
Reporting from Toronto, Ontario

At her local grocery store, Benedykta Mazur has taken on the role of a bit of a sleuth.

Since Donald Trump launched a trade war with Canada, she's been doing her best to buy Canadian wherever she can.

She refuses to buy anything grown or made in the US.

"It's a no, an absolute no," she tells me. "This is something that is not going to be just kind of wishy washy."

Mazur says that while Canadians are known for being "really nice", it's time to focus that friendliness elsewhere and build ties with countries that "share commonalities in regards to how you treat another person, because countries are made of people".

Image source, Reuters

Nato foreign ministers are meeting in Brussels today to talk about Russia’s war in Ukraine – but some are also reacting to Trump’s sweeping tariffs.

UK Foreign Minister David Lammy says he regrets the "return to protectionism in the US", while Canadian Foreign Minister Mélanie Joly says Canada’s relationship with the US will never be the same again.

Joly also says Canada is putting maximum pressure on the Trump administration.

We’re expecting to hear from US Secretary of State Marco Rubio, who’s also in Brussels, a bit later today.

Just a reminder – Canada wasn’t on the list of new tariffs announced this week, but Trump had already imposed a 25% tariff on goods coming into the US from Canada. He’s also previously called for Canada to become the US’s 51st state.

Ali Abbas Ahmadi
Reporting from Windsor, Ontario

Carmaker Stellantis says it will temporarily shut down its assembly plant in Windsor, a Canadian city on the US border, next week because of car tariffs announced by US President Donald Trump.

Derek Gungle, who works on the assembly line at the plant, says the news was “kind of expected” after the tariffs were announced – but still “scary, very scary”.

Speaking quietly after giving several interviews, Gungle says Windsor depends heavily on cross-border trade, and any threat to that could have devastating consequences.

If the shutdown becomes permanent or he loses his job, Gungle says he has “no idea” what he’ll do.

Image source, Getty Images

The boss of construction giant JCB has urged the UK government not to hit back at Donald Trump’s tariffs, warning it could lead to “a trade war we can only lose”.

It comes after the UK published a 417-page list of US goods that could face tariffs in response.

JCB has announced it will double its investment in a new factory in Texas, but chief executive Graeme McDonald says this won’t affect jobs in the UK.

“We can’t ignore the biggest market in the world,” he tells BBC Radio 4’s Today programme, adding the best way to deal with the tariffs is to “make in America”.

Trump has said companies producing in the US won’t face tariffs, but McDonald says it’s still unclear what “make in America” actually means, given global supply chains.

His message to the UK government: “do not retaliate, negotiate” – as there’s “a deal to be done” with the US.

Jim O’Neill, former chief economist at Goldman Sachs and treasury minister, says the UK should think about what it can gain from and offer to the rest of the world in response to US tariffs.

Speaking to BBC Radio 4’s Today programme, O’Neill suggests the UK should talk to other G7 countries about lowering trade barriers, especially for cross-border services, “which is what the UK has a marginal advantage in”.

“The most important thing is to try to more seriously pursue the obvious things elsewhere in the world that would be to our benefit – I’d include China and India in that too,” he says.

O’Neill also says that if the US wants to impose tariffs, it’s “in the bounds of feasibility” for other big economies to restructure and stop their “addiction to the US consumer”.

The UK government is "working at pace" to secure a trade deal with the US, a treasury minister tells the BBC.

Speaking on BBC Radio 4’s Today programme, James Murray says the government is "disappointed" global tariffs have been introduced, but it will keep a "cool head" and take a "pragmatic approach".

The focus is on getting a trade deal, says Murray, but the government is keeping "everything on the table" when it comes to its response.

Tariffs are yet another example of colossal, upending changepublished at 08:50 British Summer Time 4 April

08:50 BST 4 April

Chris Mason
Political editor

President Trump's lament about the consequences of deindustrialisation in America and his reaction to that is prompting the UK and others to have to think nimbly and devote considerable bandwidth to preparing contingencies for what might happen next.

How should we understand and grapple with the magnitude of what we are witnessing?

Prime Minister Keir Starmer is not a man known for flights of rhetorical fancy.

So it is instructive to see how he is articulating this moment.

He claimed it was "the beginning of a new era for trade and the economy" and not just this, but was the second such paradigm shift we have witnessed just in the last few months.

There was already the beginnings of a new era for defence and security, he suggested, with the UK, Germany and others committed to ramping up spending on the military.

• Read the full story here

Jamie Whitehead
Live reporter

Image source, Getty Images

President Trump's baseline tariff – a 10% tax on all imports to the US – comes into effect tomorrow, 5 April.

But it’s not a one-size-fits-all charge.

Countries Trump sees as “the worst offenders” on trade will have higher rates imposed. These take effect on 9 April. The European Union will face a 20% rate, Japan 24%, and China 34%.

China’s rate is on top of earlier duties, meaning its total tariff on exports to the US will be 54%.

The UK will only be subject to the 10% baseline tariff.

BBC Verify has looked into how these tariffs were worked out.

The global car industry has taken a big hit, with a 25% tariff on all foreign-made cars coming into effect shortly after the announcement earlier this week.

But hundreds of products are exempt. These include energy products, some minerals and chemicals used in energy and manufacturing.

Not all countries are affected by the new tariffs either. Canada and Mexico weren’t mentioned this week, but they could still face 25% tariffs on most of their imports.

Russia isn’t on the list either. The White House reportedly said that’s because existing sanctions on Russia already "preclude any meaningful trade".

We’ve got more on who’s being charged in our at-a-glance guide.

Tom Espiner
Business reporter

Market jitters are still being felt across Europe as traders factor in uncertainty over the possible economic impact of Trump's tariffs.

The fallout from his blanket tariff announcement on Wednesday continues, with the FTSE 100 in London down nearly 0.9%, the Cac 40 in Paris falling 0.92%, and Frankfurt's Dax slipping 0.74% in early trading.

Heading to a golf tournament in Florida on Thursday, Trump told reporters he thought things were going "very well", adding: "The markets are going to boom."

The FTSE 100 opened more than 0.3% lower and has continued to fall. It quickly dropped to 0.56%, then slid further to 0.68%.

Traders are concerned about the global economic impact of US trade policy.

We'll bring you more updates on this.

Tom Espiner
Business reporter

Before trading gets under way on the London stock market at 08:00 BST, here's a quick look at what's been happening around the world.

Markets have been on edge over the possible impact of Trump’s tariffs, with traders worried about a US or even global recession.

US markets all closed lower on Thursday – the Dow Jones fell nearly 4%, the S&P 500 dropped close to 5%, and the tech-heavy Nasdaq slid nearly 6%. Those are big moves.

Asian markets also took a hit – Japan’s Nikkei was down more than 2.6%, and Australian shares dropped to their lowest level in eight months, with the S&P/ASX 200 index down more than 2.4%.

As a general rule, if stock market indexes move more than 2% in a day, up or down, it usually signals something significant.

Image source, Getty Images

Image source, Reuters

US President Donald Trump told reporters last night that UK Prime Minister Keir Starmer was "very happy" about how Britain has been treated on tariffs.

"We have a very good dialogue and I think he was very happy about how we treated them with tariffs," he said on board Air Force One, referring to the 10% import tax he imposed on the UK, which is among the lowest globally.

Yesterday, Starmer said his government was "taking a calm approach, acting in the national interest".

But the government has also published a list of US products it could target with retaliatory tariffs – seen as a sign it's taking a tougher line.

Tom Bateman
US State Department correspondent, travelling with Marco Rubio

European anger over the 20% import tax on EU goods to the United States was clear from foreign ministers at a Nato meeting in Brussels yesterday.

The French delegation said transatlantic solidarity was "being tested” by President Trump’s tariffs, while Germany’s foreign minister suggested the move damaged Nato’s economic security.

Concerns were such that they were put directly to the US Secretary of State Marco Rubio, despite the meeting being about defence.

A senior State Department official confirmed the issue of tariffs was raised in the meeting of 32 foreign ministers, but denied the tone was accusatory, describing it instead as collegial.

It comes amid the biggest strain in US-Europe relations in years, with the Trump administration unleashing a series of demands as well as insults to their European allies over what they have described as countries freeloading on American security guarantees.

Tariffs are taxes charged on goods imported from other countries.

The companies that bring the foreign goods into the country pay the tax to the government.

Typically, tariffs are a percentage of a product's value. A 20% tariff on Chinese goods means a product worth $10 (£7.76) has an additional $2 charge.

Firms may choose to pass on some or all of the cost of tariffs to customers.

The US has typically charged lower tariffs on goods than other countries.

Trump's new tariffs could lead to a sharp increase in the prices people pay for goods in the US and around the globe.

We've been reporting that the Trump administration still feels confident about the tariff measures, despite the drop in the stock market. But some Republicans are starting to feel uneasy.

What about the American people?

"I know we're all going to get pinched in the pocket for a while. I think in the long run, it's going to get us out of the massive deficit that we're in," 71-year-old Mary Anne Dagata from Michigan tells the BBC.

But Catherine Foster, 58, from Florida, is worried about her retirement.

"Trump is not a king and I feel like our Congress and Senate is letting us down, both parties, by not pushing back [on tariffs]," she says.

We've got more reaction from the US on the tariffs here.