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 Canadian dollars' 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

Dharshini David
Chief economics correspondent

It depends - on the extent to which the extra costs are passed on by importers, and how behaviour changes.

Some of the effects could come through very quickly. A lot of imported food in the US comes from its neighbours - including one in four fresh vegetables Americans put in their trolley.

With slim profit margins in the grocery sector, shoppers could be in line for sticker shock.

Businesses - in particular carmakers - with supply chains that span the US, Mexico and Canada are likely to feel the pinch.

Economists reckon the 25% tariffs may trim a half a percentage point off growth in the US - and add a similar amount to average consumer prices: unhelpful but not disastrous.

And of course income from tariffs could boost government revenues.

But uncertainty itself over President Trump’s trade policy has already dented business and consumer confidence - and an escalation of this trade war could be far more damaging.

Image source, EPA

Tariffs are taxes charged on goods imported from other countries.

Most tariffs are set as a percentage of the value of the goods, and it's generally the importer who pays them.

So, a 10% tariff means a product imported to the US from China worth $4 would face an additional $0.40 charge applied to it.

Increasing the price of imported goods is meant to encourage consumers to buy cheaper domestic products instead, thus helping to boost their own economy's growth.

Trump sees them as a way of growing the US economy, protecting jobs and raising tax revenue.But economic studies of the impact of tariffs,, external which Trump also imposed during his first term in office, suggest the measures ultimately made prices higher for US consumers.

When Donald Trump confirmed 25% tariffs would come in effect on Tuesday for Canada and Mexico, the feelings were felt almost immediately on Wall Street.

The three major indexes in the US sank after Trump's comments.

The Dow Jones Industrial Average ended the day down 1.48%, the S&P 500 sank 1.76% and the Nasdaq fell 2.64%.

We'll now be keeping an eye on the Asian markets to see how the news is received.

Tariffs are a central part of Trump's economic plans. He promised to introduce import duties against some of America's main trade partners during his election campaign.

He says tariffs will boost US manufacturing and protect jobs, as well as raising tax revenue and growing the economy.

The White House said, external said the president was also "taking bold action to hold Mexico, Canada, and China accountable to their promises of halting illegal immigration and stopping poisonous fentanyl and other drugs from flowing into our country."

Fentanyl is linked to tens of thousands of overdose deaths in the US each year.

The Trump administration says the chemicals come from China, while Mexican gangs supply it illegally and run fentanyl labs in Canada. Canadian Prime Minister Justin Trudeau said his country was responsible for less than 1% of fentanyl entering the US.

President Trump has threatened to impose the tariffs - which are a tax on imports - on Canada and Mexico on 4 March, in response to what he says is the unacceptable flow of illegal drugs and undocumented migrants into the US.

"No room left for Mexico or for Canada," Trump said at the White House on Monday. "The tariffs, you know, they're all set. They go into effect tomorrow."

"What they'll have to do is build their car plants, frankly, and other things, in the United States, in which case they have no tariffs," he added.

Welcome to our live coverage.

Donald Trump has said "all is set" for 25% tariffs on goods from Mexico and Canada starting Tuesday, as time runs out for the two US neighbours to reach a deal with Washington.

Trump's statement raised fears of a trade war in North America as Canada and Mexico have both vowed to retaliate. US stocks, the Mexican peso and the Canadian dollar have all fallen.

An additional 10% tariff on Chinese imports is also expected to come into force, leaving all three of America's top three trade partners facing significantly higher trade barriers than just a few weeks ago.

Join us as we bring you the latest from our teams in North America and Asia.