Jonathan Josephs
BBC business reporter

Image source, Getty Images

"We're going to take in hundreds of billions of dollars in tariffs, and we’re going to become so rich, you’re not going to know where to spend all that money."

That was Donald Trump's prediction on Sunday about what new tariffs would mean for the future of the US economy.

We've also heard him repeatedly talk about balancing out relations with other countries that sell the US more than they buy from them.

The president sees that as handing over America's hard-won wealth and status as the world's biggest and most influential economy.

But the idea that tariffs can fund the US government is one that goes back to before the First World War when about half of the US government's income came from tariffs.

A decisive presidential win by Woodrow Wilson over Theodore Roosevelt in 1912 meant those levies were steadily cut, with that revenue eventually replaced by the income tax still collected by the government today.

Now, Trump wants to cut taxes on individuals and on businesses as he expands tariffs.

But a lot has changed in international trade over the last century, and the global economy has grown to its current size largely without major tariffs in place. As that environment shifts, many economists are warning that that global prosperity could now be very much at risk.

• We are ending our live coverage of the tariffs for now. You can stay updated on this story here: Trump threatens 200% tariff on alcohol from EU

During his campaign, Trump promised tariffs, and now those promises are coming to fruition.

Here’s a rundown of the tariffs that the president has imposed or threatened to levy, along with countermeasures that other countries have slapped on US goods.

Metals: A tariff of 25% on steel and aluminium from all countries took effect this week. The biggest exporters of steel to the US are Canada, Brazil and Mexico.

Trump had also threatened to raise the metals tariff to 50% for Canadian imports, but backed off after Canada cancelled a tax on energy exports.

Canada, Mexico and China: Aside from the metals tariffs, Trump put a 25% tariff on all goods from Canada and Mexico. He raised a 10% tariff on all Chinese goods – a measure that has been in place since his first term – to 30%. These levies, the president said, were in response to the illegal drug fentanyl entering the US.

Alcohol: Today, Trump threatened a 200% tariff on EU "wines, champagnes, and alcoholic products" in response to a 50% import duty on US whiskey.

Response: Canada retaliated with new duties on about $20 billion of US goods, including orange juice, peanut butter, alcohol, cast iron products, apparel and footwear. Those taxes could increase up to five times, the Canadian government says, if this trade war continues.

China has responded with up to 15% import taxes on US farm goods.

And EU countries put import taxes of about $28 billion on a range of goods including steel, aluminium, textiles, appliances and farm products. Those tariffs are scheduled to start in April.

Mexico has so far held off on retaliatory taxes.

Exceptions: Trade rules are notoriously complicated and there are some exceptions and carve-outs – for instance, Canadian energy imports are taxed at a lower level of 10%, and a week ago Trump announced a temporary reprieve for some products including cars made in Mexico and Canada. Low-value goods from China – shipments worth less than $800 – are also exempt.

Douglas Fraser
Scotland business & economy editor

Canada has taken a complaint about the US’s use of tariffs on steel and aluminium to the World Trade Organization (WTO), which is there to police the rules on trade.

The legal document says the removal of Canada’s exemption from additional duties in a US presidential order last month, which took effect yesterday, is counter to trade rules set out in 1994, under the General Agreement on Trade and Tariffs (GATT), which preceded the modern version of the WTO.

The formal approach through the WTO is to request consultations with the US government over their trade dispute, looking forward to a time and location for these to take place.

The political messaging is less polite. The WTO does not have the power to fine a country that breaks trade rules, but it can authorise a wronged country to retaliate with proportionate trade measures.

Image source, Getty Images

WineAmerica, a Washington DC-based group that lobbies Congress on behalf of the US wine industry, says that around 1.84 million people are employed by the industry.

According to the group, 1,007,459 people are directly employed by wineries. Another 364,324 work in roles which supply goods and services to the industry, and 115,950 work in the supply sector.

WineAmerica formally opposes alcohol tariffs, and released a statement this week condemning Canadian provinces for removing American wine from their shelves.

"Canada is our largest export market," the statement reads. "Not only does that directly affect exporting wineries, but it indirectly hurts all US wineries if previously exported US wines end up flooding our stores, stealing shelf space and decreasing prices."

The statement adds that they have joined other alcohol producers in a coalition called "Toasts not Tariffs" and are continuing to monitor the trade situation.

Michelle Fleury
BBC World News Correspondent in New York

Image source, Getty Images

Whether it’s Mexican tequila, Canadian beer, American whiskey, or French and Italian wine, alcohol is taking centre stage in the ongoing tit-for-tat tariff wars.

The logic is clear: these are high-profile sectors, and in the case of American whiskey, many producers hail from key Republican districts - making a tariff a potentially potent political tool.

If the aim of these retaliatory tariffs is to apply maximum pressure on targeted countries, booze is the perfect target.

Europe, increasingly a crucial market for U.S. whiskey, saw exports jump nearly 60% over the past three years, reaching $699 million in 2024. Meanwhile, the US wine trade remains heavily tied to imports from France and Italy, putting more diplomatic leverage in play.

Industry insiders say this isn’t their first rodeo with tariffs, but this time could carry more serious and long-term consequences.

Recent fluctuations in global trade haven’t been exclusively between the US and its partners.

On Saturday, a sea change came for Canada when China announced 25% tariffs on pork, fish and shellfish imports as well as an 100% tariff on canola meal and oil from 20 March.

The move mirrored Canada’s in October which added 100% tariffs on Chinese electric vehicles and 25% on its steel and aluminium imports.

China makes up 18.7% of Canada’s global fish and seafood exports in 2023 according to data from the Canadian government, while China’s rapeseed imports from Canada accounted for 73% of its total intake in 2024.

These new fees add further ripples to the growing wake of global trade uncertainty.

Ontario Premier Doug Ford says his meeting with US Commerce Secretary Howard Lutnick in Washington DC was "very, very productive" and that he is feeling "very positive" following their discussion, despite remaining "bumps in the road".

"We feel the temperature is being lowered," he tells reporters outside the US Department of Commerce after their talks, adding that they agreed to meet again next week.

"We want the best outcome for both countries," he says, emphasising that Canada is a major trading partner for the US. "We're like a family, and sometimes there's tension between families."

Ford says the Americans and Canadians plan to stay in close communication about trade going forward. They are meeting again next week.

"Let's continue on this conversation, but I'm leaving this meeting extremely positive", he says.

The meeting came about after Ford earlier this week announced a 25% surcharge on electricity sent from the province to northern US states, in response to 25% tariffs imposed by the Trump administration.

Ford then also threatened to "shut off electricity completely" if the US were to further escalate the ongoing trade war.

Donald Trump and the US then retaliated by threatening to double the US's upcoming 25% global steel and aluminium tariffs to 50% for Canada.

But by Tuesday afternoon, both parties had stepped back from those threats, with Lutnick inviting Ford and Canada's Finance Minister Dominic LeBlanc south of the border to chat in person.

Alcohol is a major portion of the US's agricultural imports.

From the EU specifically, French and Italian wines, as well as French spirits, lead the pack in US imports in 2023, according to United Nations trade data.

The US imported $26.2b in alcoholic beverages in 2022, according to the US Department of Agriculture. That same year, the US imported $7.8b in wine and $6.7b in beer.

Tequila from Mexico was the fastest growing alcoholic import to the US in 2022, while imports of whiskey and vodka decreased, according to USDA.

The EU is ready to respond in a "swift and definitive way" if the US follows through on Trump's threat to impose a 200% tariff on European alcohol, a spokesperson for the bloc has told the BBC.

Olof Gill, European Commission spokesperson for economic security and trade, says that so far this is "just a social media statement" and the EU will only react "when that social media statement translates into something more tangible".

He insists the EU is "ready to respond in a swift and definitive way should that materialise", but adds "that is what we very much want to avoid".

"The European Union regrets and is very disappointed by this latest statement by the US president," he says, "we believe that these types of tariffs are unjustified, unfair and counterproductive."

"The most effective way to negotiate is to have strong leverage on your side," he says.

Gill denies that there is an unfair trade imbalance between the US and EU, but accepts there is "a comparatively small trade surplus".

He also says Trump's claim that the US cannot sell cars into the EU is "certainly not true".

The spokesperson says they will speak to US officials tomorrow.

Ontario Premier Doug Ford, who is currently on a diplomatic visit to Washington DC, spoke to Fox News ahead of his meeting with the US commerce secretary this afternoon.

"We want a constructive meeting," he said, adding that he plans to tell US officials that Canada is "your largest customer".

"Nobody buys more products off the United States than we do."

Tariffs on Canada will amount to taxes on the American people, Ford says.

"The markets are speaking. They're absolutely tumbling," he said, criticising "uncertainty" caused by Trump's policies.

The three major US stock indices between about 1% and 2% lower on Thursday.

"Why attack your best neighbour, your treasured ally?" he says, adding "this does not make sense".

He says that he is open to further negotiation, but that industries cannot pivot on a dime.

"You can't unscramble an egg, you gotta make a larger omelette," he says.

Ford, who is a long-time supporter of Trump, said that he favoured the Republican president up until his most recent election, until he "turned the guns" on Canadians.

"Now he wants to attack our families, take food off our tables, shut down our manufacturing facilities," he said.

Natalie Sherman
New York business reporter

I spoke earlier to former Trump adviser Stephen Moore, now an economist with the Heritage Foundation. I got a long pause when I asked him if he thought Trump was prepared to make good on this 200% EU alcohol tariff threat.

"I can't say," he told me. He said the measures would clearly hurt the US, but warned they were likely to hurt Europeans more.

"This comes down to pain threshold but Trump does understand that these other nations have a lot more to lose than we do if this becomes a protracted stalemate."

He said he thought the EU would have to make a concession to defuse tension, noting that Trump had consistently voiced concerns about rules on agricultural products.

"Absolutely this is going to end up with a deal," he said. "It's only a question if it ends up in a deal in a day, a week, a month or six months, but there will eventually be a negotiated settlement."

Northern Ireland whisky could benefit from Trump's tariffspublished at 20:57 Greenwich Mean Time 13 March

20:57 GMT 13 March

John Campbell
Northern Ireland economics and business editor

Image source, Getty Images

Whiskey producers in Northern Ireland could be in a uniquely advantageous position if Trump implements his proposed 200% tariffs on EU spirts.

Whisky distilled in Northern Ireland, such as Bushmills, is legally Irish.

But because Northern Ireland is part of the UK it is not in the EU, and therefore its exports would not be hit by tariffs targeting EU goods.

Meanwhile, distilleries in the Republic of Ireland, which is in the EU, would be hit with the tariffs.

That would give Northern Ireland distilleries a significant price advantage in the US - assuming that Trump doesn't also extend spirit tariffs to UK goods.

Image source, Getty Images

Here's what you need to know about today's new tariff announcement, if you're just joining us:

• US President Donald Trump has threatened a 200% tariff on alcohol from EU countries – he was responding to the bloc's plan to impose a 50% tariff on US whiskey, a move which itself came in retaliation to Trump's steel and aluminium tariffs
• Most major stock markets in the US and EU have moved lower for the day, but US Treasury Secretary Scott Bessent says tariffs will ultimately protect American workers and that he is "less concerned about the short-term"
• Trump has taken a similar line today, saying tariffs may cause some "disruption" for the economy, but that it "won't be long". He insists: “I’m not going to bend at all"
• Christine Lagarde, President of the European Central Bank, warns that everyone will lose as a result of a trade war
• Commerce Secretary Howard Lutnick is currently meeting with Canadian Finance Minister Howard Lutnick and Ontario Premier Doug Ford as the trade row with the US's northern neighbour continues

Image source, Getty Images

As our colleague at the White House Bernd Debusmann Jr just told us, Commerce Secretary Howard Lutnick has just finished speaking live to Fox News ahead of his meeting with Canadian Finance Minister Dominic LeBlanc and Ontario Premier Doug Ford. Here's what he told that outlet:

• "Tariffs are gonna be a huge revenue producer," he said, going on to condemn Ireland for operating a "tax scam" in their country
• Donald Trump has an "aspirational" goal to "waive" taxes on Americans making under $150,000, but only after the budget is balanced
• He said that Trump has "a plan to balance the budget" which includes removing $1 trillion of "waste, fraud and abuse" from federal spending. For context, the US federal government spent about $6.75 trillion in the 2024 fiscal year, according to Treasury data
• The "Trump gold card" - a plan that would allow immigrants to purchase the right to live and work in the US while applying for citizenship for $5 million - will raise $1 trillion and be a "huge revenue producer"

• "Canada exists leaning on our economy," he said, going on to criticise Ontario Premier Doug Ford's threat earlier this week to increase the price of energy imported to northern US states by 25% - which he later walked back - in retaliation from Trump's 25% tariffs on Canadian goods
• Continuing to speak about Canada, Lutnick said: "What are you doing for us? I know what you're doing for you. But what are you doing for us?"

Bernd Debusmann Jr
Reporting from the White House

Some other reporters at the White House and I just ran into US Commerce Secretary Howard Lutnick out on the lawn after he finished an interview with Fox News - we asked him a few questions, but he declined to answer.

Smiling, an animated Lutnick told reporters outside the West Wing that he's got "no minutes" to chat, as he's on his way to talk to Canada's finance minister and Ontario Premier Doug Ford.

He then walked past about two dozen reporters and into the West Wing.

Image source, Getty Images

The EU alcohol tariffs are just the latest instalment in a week of back and forth around the world on global trade.

On Monday, Ontario Premier Doug Ford threatened the US with a 25% tariff on the electricity it sends to northern American states after Trump said he would charge 25% on Canada’s steel and aluminium imports.

In response, Trump posted on Truth social doubling the original fee on the Canadian metals coming into the US, calling Ford’s move “egregious”.

But by the end of the day, both parties' threats had been wound down thanks to an "olive branch" that Ford said US Commerce Secretary Howard Lutnick extended to him on the phone.

The two men are due to meet in Washington shortly, alongside Canadian Finance Minister Dominic LeBlanc to negotiate their next steps after Trump’s original 25% steel and aluminium tariff came into effect on Wednesday.

We'll keep our eyes and ears peeled for any info that we hear after that meeting, and will bring it to you here.

Natalie Sherman
New York business reporter

Mary Taylor, a US-based importer of European wines, weathered the 25% tariff Trump put on EU bottles during his first term by expanding her distribution in Europe.

But Taylor, who brings in 2 million bottles a year and sells across the US, said the latest threat posed a more existential risk to her business that would ripple out to restaurants, bars and distributors.

"200% is a whole different ball game," said Taylor, who is currently waiting for an order of 16 containers, the cost of which could triple if Trump follows through.

"It just looks like a big, giant threat to our livelihoods."

After waking up to the news, she called her congressmen, jumped on emergency industry calls and reached out to suppliers.

But she said she was not feeling optimistic, noting that the US and EU did not reach a deal to remove the alcohol tariffs until Trump left office.

Tariffs continue to hit investors, with the major US stock markets down on today’s news.

The S&P 500, a broad index of the biggest US companies, was down more than 1% and is about 10% off of its most recent high – a level that analysts consider a market "correction", or an indication of a broader slump.

Other major US indexes, the Dow Jones (down 1.3%) and Nasdaq (down 1.8%), had also posted losses as of 15:00 New York time (19:00 GMT).

Earlier, most major European stock markets were down. The French CAC was down 0.6% and the German DAX exchange was down nearly 0.5%, although in the UK the FTSE was up very slightly.

Christine Lagarde, President of the European Central Bank, tells BBC's HARDtalk that "any trade war is going to hurt the global economy".

"Some countries will be hurt more than others. Some countries will see inflation move more than others. But everybody is to lose as a result," she said.

Right now, "everybody is positioning", Lagarde told the BBC’s Stephen Sackur, adding she suspects that "until there is implementation, parties are going to sit down and negotiate".

When asked about the EU’s retaliatory tariffs on the US, she said the bloc had "no choice".

Regarding Trump’s comment that “the European Union was formed to screw the United States”, Lagarde says that it was “not just bad language”, but “an abuse of history”.

The interview will be available in full tomorrow on BBC iPlayer and as a podcast on the World Service.

Image source, Getty Images

Most countries in the world have a range of tariff rates covering different goods they import from various trading partners, which vary by product and country of origin.

Countries report an average external tariff to the WTO, external, which reflects the overall average tariff rate applied to all imports.

Before Donald Trump's new policies, America's average tariff rate has been considerably lower in recent years than the average tariff rate of some of its other trading partners.

The US had an average external tariff rate of 3.3% in 2023.

That was slightly lower than the UK's average tariff of 3.8%.

It was also below the European Union's average tariff rate of 5% and China's average tariff rate of 7.5%.

For instance, India's average tariff rate was 17%, while South Korea's was 13.4%.

America's average tariff rate was also lower than Mexico's (6.8%) and slightly lower than Canada's (3.8%), though trade agreements between the US and these countries mean that many US exports to its North American neighbours are not subject to tariffs.

Some tariffs are considered by Trump to unfairly target American industry, including the EU's 10% tariff on all automobiles imported from outside the bloc.

Read more here: Is Trump right when he says the US faces unfair trade?