Image source, Getty Images

If you are just joining us, here's what you need to know about Trump's tariffs against the US's three biggest trading partners, which have sparked retaliatory action from two of them, Canada and China:

• Trump's long-threatened 25% tariffs against Canada and Mexico came into effect at midnight in Washington DC, as did a new 10% levy against China
• Canada had vowed that it too would impose 25% tariffs against $155bn worth of US goods when Trump's tariffs kick in
• China swiftly announced its own counter measures, which include 10-15% tariffs on some US agricultural goods
• Beijing has also targeted various US firms in aviation, defence and tech by adding them to an "unreliable entity list" and imposing export controls
• Mexico is expected to announce its response later today - President Claudia Sheinbaum said on Monday that her country has made "contingency plans"

Stay with us as we bring you the latest.

Dharshini David
Chief economics correspondent

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. It can be shoppers who bear the bulk of tariffs in the form of higher prices, if they're passed on, as well as 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 by President Trump have caused such consternation around the globe.

Natalie Sherman
New York business reporter

It is not just companies bringing products into the US that are worried about the tariff fight. US-based exporters are concerned too.

Scott Beggs leads a US manufacturing business in Mississippi that employs more than 100 people making products including wood panelling and backyard ziplines.

He’s been pushing to expand into Canada, with some success. But in recent weeks, his Canadian buyers have been putting their orders on hold, angry about US actions and expecting their government to retaliate. Canada has said its retaliatory tariffs would kick in as soon as the US levies come into effect.

“All my efforts for the last four to five years are going to go down the toilet,” Mr Beggs said.

Canada had said on Monday that it will retaliate with 25% tariffs against $155bn worth of US goods when American tariffs kick in.

Prime Minister Justin Trudeau said Canada will immediately target $30bn worth of products, and target the remaining $125bn over 21 days. Any fresh duties Canada imposes will be in place for as long as the US tariffs are, Trudeau had said.

Canada's dollar-for-dollar tariffs on US products during Trump's first administraton came up to C$16.6bn.

Another way Canada could hit back at the US - and probably the most painful - is to restrict access to energy. Canada is the top oil supplier to the US and also provides some electricity to 30% of the states.

Image source, Getty Images

While Canada and China have already vowed retaliatory tariffs, Mexico is expected to announce its response on Tuesday.

Before the US' 25% tariffs on Mexican imports came into force, President Claudia Sheinbaum said on Monday that her country has made contingency plans.

“In this situation, we need composure, serenity, and patience. We have Plan A, Plan B, Plan C, and even Plan D," she affirmed.

Sheinbaum added that she would speak more about Mexico's response on Tuesday.

With 25% US tariffs hitting Canada, the premier of the Canadian province of British Columbia, David Eby, told the BBC's Newshour programme that the world should take a stand.

"As the President threatens the entire world, it will require the entire world to stand together and draw a line in the sand."

Mr Eby recognised that the tariffs are "incredibly challenging" for Canadian companies and for the government but he also said they are "confusing" because they will hurt Americans too.

He gave the example of key exports like Canadian lumber and aluminium which are widely used in construction and will become more expensive in the US.

"If you are rebuilding in North Carolina from floods or in [Los Angeles] from fires you are just adding 25% to the cost of your homebuilding," Mr Eby noted.

British Columbia is in the far west of Canada - and exports lumber, aluminium, oil and gas, and various high-tech services to the US.

Nick Marsh
Asia Business Reporter, Singapore

China’s top political advisory body will kick off its yearly meeting today, a day before the country's rubber-stamp parliament meets.

China's slowing economy is top of the agenda, and now so is Trump's new 10% tariff - the country is already struggling with a chronic lack of domestic consumption, because of an ongoing property crisis and unemployment, among other things. The tariffs could now also hurt exports, which have been crucial for China's growth.

Party leaders are expected to use the meeting to set a growth target of around 5% for 2025 - to achieve this, the Party has promised an increase in government spending and, above all, huge investment in what President Xi Jinping calls "high-quality development": that is renewable energy and artificial intelligence.

The long-term aim is to become a world leader in these industries and, in time, become less vulnerable to American measures such as tariffs.

In the short-term though, China knows it has its own problems to fix, with or without US tariffs.

But the tariffs certainly make that harder to do.

Among the US entities it has targeted, Beijing has singled out US biotech firm Illuminia, saying it adopts "discriminatory measures against Chinese firms".

It has banned Illuminia from exporting gene sequencing machines to China from 4 March, and added the company to its "unreliable entity list".

Illuminia "seriously hurts Chinese firms' legitimate rights", China's commerce ministry said.

Among the 15 entities added to China's export control list are companies in the aviation, marine engineering, and the artificial intelligence sectors.

Beijing's finance ministry has announced 15% tariffs on some US agriculture imports, including chicken, wheat, corn and cotton.

It has slapped 10% tariffs on other produce such as soybeans, pork, beef, fruits, vegetables and dairy products. These duties will kick in on 10 March.

China's commerce ministry has also added 10 US firms to the so-called "unreliable entity list" and 15 US entities to an export control list, effective from today.

China has began to announce retaliatory action. A press conference is going on now, and we will bring you more updates as we get them.

The US' tariffs on Chinese, Mexican and Canadian imports have come into effect.

Trump has announced 25% tariffs against Canada and Mexico, and 20% tariffs against China - doubling the levy on China from last month.

Canada has said it will retaliate with 25% tariffs on $150bn worth of US goods, while Mexico and China have also vowed to retaliate.

Laura Bicker
China correspondent

Image source, Getty Images

China's statements on trade tariffs are signalling its desire for the US to get to the negotiating table.

The latest statement from the Ministry of Commerce - published hours before fresh duties take effect - urges the US to return to the “right track” and “properly resolve differences through equal dialogue as soon as possible”.

In other words, the door to a deal is still open - even after the first round of tit-for-tat tariffs in February. But, just as they did then, Beijing is also making it clear it is ready to hit back again.

State media has suggested that this time, China will target agricultural goods and food products.

Beijing imposed hefty tariffs on a list of US farm products including soybeans during Trump's first term. These led to an 80% plunge in sales of American soybeans to China over two years.

If China starts targeting American farmers, they are targeting the president’s base in rural America.

Beijing may think that this will put more pressure on the White House to avoid a full-blown trade war - and give them a stronger negotiating position ahead of potential talks.

Laura Bicker
China correspondent

Beijing has said it "firmly rejects" additional US tariffs on Chinese goods and will retaliate in a commerce ministry statement, hours before fresh tariffs are due to take effect.

It's worth remembering that the total levy now stands at 20% - and that is on top of the tariffs already imposed on many Chinese goods, from 100% on electric vehicles to 15% on clothes and shoes.

The state-run Global Times newspaper said Bejing was ready with countermeasures which will likely target US agricultural and food products.

China remains the biggest market for US agriculture products even after Beijing slapped tariffs of up to 25% on soybeans, beef, pork, wheat, and corn in 2018 - in retaliation for duties on Chinese goods imposed by Trump's first administration.

If China retaliates again, and tit-for-tat trade tariffs return, it raises the prospect of an all-out trade war between the world's top economies.

Canada is expected to react forcefully and immediately to the new tariffs, and we have an idea of what it will do.

Canada got tough on US trade during Trump’s first administration. One move it made in its first tariff war with its neighbour was to apply dollar-for-dollar tariffs, where it slapped identical tariffs on US aluminium and steel, and ensured the total dollar value of the American goods it taxed equalled the US tariffs on Canadian exports. That came up to around C$16.6bn at the time.

This time, the possible use of dollar-for-dollar tariffs could be much larger, with Canada posting a list of $30bn of potential goods it would tax "until the US eliminates its tariffs against Canada".

The list, external is heavy on agricultural products, but also includes inedible items like dental floss and luggage.

There are other options for retaliation, like putting tariffs on select goods and, probably the most painful for many parts of the US, restricting access to energy. Canada is the top oil supplier to the US and also provides some electricity to 30% of the states.

Image source, Getty Images

Canada has vowed to retaliate with 25% tariffs against $155bn worth of US goods should American tariffs come into effect as expected at midnight.

Prime Minister Justin Trudeau said Canada will first target $30bn worth of products, and target the remaining $125 billion over 21 days.

"There is no justification for [the US'] actions... Canada will not let this unjustified decision go unanswered," Trudeau said in a statement on Monday, external.

Any fresh duties Canada imposes will be in place "until the US trade action is withdrawn", he said, adding that his country will pursue "non-tariff measures" should US tariffs not cease - without specifying what those measures were.

The stock market in Asia was nervous as investors braced for new Trump tariffs that could widen the trade war.

Japan's Nikkei 225 was down more than 1.8%, the sharpest decline in the region. Hong Kong's Hang Seng Index and Australia's ASX 200 were both lower by about 0.8%, and South Korea's Kospi was mostly trading flat.

Aside from tariffs, investors are keeping an eye on a key political meeting of China's top leaders this week in Beijing - that's where they will decide how the world's second-largest economy will revive itself while coping with the impact of Trump's tariffs.

The Chinese government has said it will take retaliatory steps against the Trump administration's plan to impose an additional 10% tariff on Chinese imports - which takes the total levy to 20%.

"China will take countermeasures to firmly safeguard its own rights and interests," said a statement from the country's commerce ministry on Tuesday.

Beijing also described Trump's tariffs as a "typical act of unilateralism and bullying", and rejected accusations that it was not doing enough to stop the flow of illegal drugs to the US.

The price of cars in America is also likely to be impacted by tariffs. That's because Canada and Mexico are two major links in the supply chain.

And it's a complicated chain.

Sometimes car parts cross the US border multiple times just for one car, so tariff's could keep piling up on top of each other.

Check out the graphic below to see what we mean.

Michael Race
Business reporter

Image source, EPA

Maple syrup

Canada's billion-dollar maple syrup industry accounts for 75% of the world's entire maple syrup production.

Fuel

Canada is America's largest foreign supplier of crude oil. According to the most recent official trade figures, 61% of oil imported into the US between January and November last year came from Canada. While 25% has been slapped on Canadian goods imported to the US, its energy faces a lower 10% tariff.

Now the US doesn't have a shortage of oil, but the type its refineries are designed to process means it depends on so-called "heavier" - i.e. thicker - crude oil from mostly Canada and some from Mexico.

Avocados

Grown primarily in Mexico due to its warm, humid climate, Mexican avocados make up nearly 90% of the US avocado market each year., external

• Read more: Things that could get more expensive for Americans under Trump tariffs