The word tariff has dominated headlines all week. So let's take a moment to unpack what tariffs are.

Essentially, tariffs are taxes charged on goods imported from other countries.

It is the company bringing the foreign goods into the country that pays the tax to the government, and firms may choose to pass on some or all of the costs to customers.

Here's our colleague Adam Fleming to take you through the rest:

Any tariffs on US alcohol could mean a valuable market for American producers takes a serious hit.

In 2023, US spirits exports reached a record $2.2b (£1.7bn), according to the Distilled Spirits Council of the United States.

Whiskey exports alone from the US accounted for $1.4b, the Council found.

Image source, EPA

Trump has taken to social media again, following up on his earlier post threatening a 200% tariff on EU alcohol, telling Americans they ought not to fear.

In a post primarily focused on criticising the Wall Street Journal and the European Union, Trump says "have no fear, we will WIN on everything!!!"

"TARIFF RELATED MONEY IS POURING INTO THE UNITED STATES," he says.

The president then paraphrases a previous holder of his office, Franklin Roosevelt, saying: “The only thing you have to fear, is fear itself!”

Then about 13 minutes later, he posted again.

"The U.S. doesn’t have Free Trade. We have “Stupid Trade.” The Entire World is RIPPING US OFF!!!" he said.

The focus so far today is on alcohol tariffs between the EU and the US. But the EU is not alone in planning tariffs on US alcohol.

Canada has implemented tariffs on US bourbon and has already started taking those products off store shelves. Those tariffs were in response to Trump's import taxes on Canadian products.

The CEO of Jack Daniel's maker Brown-Forman, Lawson Whiting, said last week the move from Canada was a “disproportionate response”.

“I mean, that’s worse than a tariff, because it’s literally taking your sales away, [and] completely removing our products from the shelves,” Whiting said on a call about earnings.

European Trade Commission spokesman Olof Gill has just told the BBC the following:

Trump has already set a deadline of 2 April to impose more reciprocal tariffs on countries around the world.

He has yet to announce the rate of the tariffs, which he says will be tailored to each country.

The move is part of a plan that Trump signed off on in February.

"The Plan shall ensure comprehensive fairness and balance across the international trading system," the president wrote in a memorandum.

The world's major economic powers are now in a tit-for-tat battle over import taxes.

US President Donald Trump has pledged to impose more tariffs in a response to retaliation by the European Union and Canada.

Yesterday he told reporters at the White House: "Whatever they charge us with, we’re charging them. Nobody can complain about that.”

The tariff on Champagne and wine goes even further than that though - a 200% levy in response, Trump says, to a 50% EU tariff on US whiskey.

It's a further escalation in a trade war which has rattled financial markets, and the stocks of alcohol companies have fallen in response to the news.

Trump's trade tariffs are set to make make everyday goods that are imported from across the border more expensive for consumers.

This measure is generally used to encourage people to buy locally made products, which would become the cheaper option.

This graphic uses the example of shoes to highlight what that could look like.

The latest phase of this global trade war kicked off when the US put a 25% tariff on all steel and aluminium coming into the US. That began on Wednesday.

The EU responded by saying it would raise its levies on up to €26bn ($28bn; £22bn) worth of US goods, including boats, bourbon and motorbikes, from 1 April.

European Commission President Ursula von der Leyen said the response was intended to be "strong but proportionate" and added that the EU stood "ready to engage in a meaningful dialogue".

"Tariffs are taxes. They are bad for business and worse for consumers," she said, warning the economic disruption put jobs at stake and would send prices higher.

"Nobody needs that – on both sides, neither in the European Union nor in the United States."

More now from President Trump's latest social media post, where he threatens a 200% tariff on EU alcohol.

Trump says if a 50% tariff on US whiskey is not removed "immediately", the US tariff will target all wines, Champagnes and alcoholic products coming out of France and other EU represented countries.

"This will be great for the Wine and Champagne businesses in the U.S." he says.

US President Donald Trump has threatened a 200% tariff on alcohol from EU countries unless the EU stops a "nasty 50% tariff on whisky".

The president just posted on Truth Social, saying the move would be great for American producers.

Stick with us, more to come.

Image source, Getty Images

It's been another day of dramatic and not-so-dramatic developments on the global trade front.

Donald Trump's 25% tariffs on all aluminium and steel imports into the US was the focus of the meeting between the US president and the Irish Prime Minister Micheál Martin at the White House on Wednesday, meant to mark the upcoming St. Patrick's Day.

The European Union has announced counter-tariffs on €26bn (£21.9bn, $28.3bn) worth of American goods, to which Trump said he would respond.

Canada announced similar measures, saying it will place similarly place tariffs on more than $20bn worth of US goods, further escalating the tariff war between the two neighbours.

UK Prime Minister Keir Starmer said his government will "keep all options on the table" when it comes to Trump's global tariffs.

Donald Trump sees the tariffs as a key part of his economic vision to boost US manufacturing, but critics say they will raise prices for US consumers in the short term.

• We are closing our live coverage of the tariffs for now. Thank you for joining us. You can read all about the day's developments here.

...and can Elon Musk afford a tumble in Tesla's share price?

The world is bracing itself as Donald Trump enacts his global tariffs. As the president begins to enforce them upon the rest of the world, the Americast team assemble to ask whether Trump’s bet on tariffs might be a bad deal for the US. How have the markets reacted, and does Trump actually care?

Plus, why has Donald Trump bought a Tesla - even though he isn't allowed to drive it?

Have a listen to the latest Americast episode below, on BBC Sounds, or wherever you find your podcasts.

The United States-Mexico-Canada trade agreement (USMCA) was renegotiated and signed in 2020 during Donald Trump's first term.

The agreement aims to reduce barriers between the three countries in regards to their imports and exports, meaning certain goods have lower, or even no tariffs on them when they enter a country.

Around half of Mexico's goods are covered by the USMCA, that percentage is less for Canada.

The new tariffs appear to break the terms of the agreement on trade, which also continued a largely duty-free trading relationship between the three neighbouring countries.

It's due to be renegotiated again by the three countries in 2026.

Canada's trade minister Mary Ng says Donald Trump's tariffs violate the United States-Mexico-Canada Agreement (USMCA).

"Canada is deeply disappointed that the US has chosen to reimpose these unjustified tariffs that hurt workers and businesses on both sides of the border," she says in a statement posted on social media.

She says Ottawa is seeking formal consultations with Washington on the tariffs on steel and aluminium.

"Instead of imposing unwarranted trade barriers, the US should work with Canada as a trusted trade partner," she adds. "We will continue to pursue all available avenues to challenge these unfair and detrimental trade actions."

Bernd Debusmann Jr
Reporting from the White House

Image source, Bernd Debusmann Jr / BBC

Just a short while ago, we heard from Peter Navarro, a senior trade advisor at the White House and one of the most vocal defenders of Donald Trump's economic policies.

Briefly speaking to reporters outside the West Wing, Navarro pointed to a number of economic factors - such as slowing inflation figures and a drop in gasoline prices - as signs that the US economy is improving.

The figures, he said, are the "heart and soul of the Trump revolution."

Navarro added that the administration is "trying to build a world in which, as in the first term, we have a lower regulatory burden, particularly for small businesses."

He also briefly addressed tariffs, saying that he hopes that "the best tax cut in American history" will be funded, in part, by tariffs.

While Navarro took no questions, he acknowledged that the economy is going through "a transition", saying it's a result of policies from the Biden administration - a talking point repeated by other administration officials over the last several days.

Image source, Getty Images

Officials in Mexico and Brazil say they won't introduce retaliatory taxes on the US just yet.

Brazil is the second largest supplier of steel to the US. Mexico is the third.

Speaking today, Mexican President Claudia Sheinbaum says they will not yet retaliate to the US tariffs on metals, and instead they will wait until the April deadline.

Brazil's Finance Minister Fernando Haddad told reporters that in the past they "have negotiated in less favourable conditions".

He adds that the US "only stands to lose" from the tariffs.

Faisal Islam
Economics editor

When Trump announced a 25% tariff on steel imports in his first term, we were part of the EU's response. At the time, we had voted for Brexit but hadn't left yet.

On this occasion, the UK has chosen to play a longer game.

The prime minister and Trump had a nice meeting, where they talked about an economic deal. The UK strategy, it seems, is not to rock the boat on steel - because there might be a bigger win in terms of no tariffs elsewhere, and perhaps a lowering of tariffs in some other deal in the future.

It does stand out, when you consider what's happening with the EU and Canada.

In February, shortly after his inauguration, Donald Trump threatened that the European Union would be hit with tariffs "pretty soon".

The US president warned that this is due to a trade deficit with the bloc - meaning its member states export more to the US than they import.

"They don't take our cars, they don't take our farm products, they take almost nothing and we take everything from them. Millions of cars, tremendous amounts of food and farm products," he told journalists.

Now after 25% tariffs were introduced on all steel and aluminium imports to the US today, the chart below shows how trade between the EU and US might be affected.

Brandon Drenon
Reporting from Washington DC

Image source, JoJo Burgess

JoJo Burgess knows steel. He's been working in Pennyslvania's steel mills for over two decades. And before him, both of his parents were also steel workers.

But what he's seeing from the Trump adminstration - a tariff tit-for-tat with longstanding trade allies - is something Burgess says he's never seen before.

"Nobody knows what this guy is doing," he says. "I don't know what to say, to be honest with you."

He tells me that in 2018, the last time Trump imposed steel tariffs, he and others in the steel industry greatly benefited.

"We were getting tens of thousands of dollars in profit sharing checks. That's extra free money in your check. Who wouldn't be excited about that," he says.

Although Burgess stands to make more money, he's worried about the larger implications a trade war presents for the US economy. He'll likely earn more, he says, but the effects would likely be blunted by rising costs elsewhere.

"Our individual industry is going to be okay with the tariffs. But what happens is it destabilizes the whole economy. Just look at the stock market," he says.