Donald Trump announces new 25% tariffs on car imports to the US

President of the United States Donald Trump has announced a new 25% tariff on cars and car parts not built in the US.

Tariffs are a common tax by one country - in this case, the US - on goods imported from another country.

The current rate of import tax is 2.5% for cars.

Mr Trump has announced a series of tariffs for some countries since he became president.

Mr Trump said that the new tariff will lead to "tremendous growth" for the car production industry in the US.

Keep reading to find out more about tariffs and how countries, including the UK, will be affected.

What has Donald Trump announced?

The US imported around eight million cars last year which accounted for about half of the country's overall car sales.

The latest tariffs will affect some countries more than others.

Mexico is the top supplier of cars to the US, followed by South Korea, Japan, Canada and Germany.

President Trump says his plan for car tariffs is to help protect American businesses and boost manufacturing in the US which means he hopes more things like cars and car parts are made in the US.

The tariffs are due to begin from early April for imported cars and likely to start from May for car parts.

What is a tariff?

Companies all over the world buy and sell things to one another.

This is known as trade - and it means globally countries can access all sorts of goods and services as well as creating stronger relationships with one another.

Goods and services can be imported and exported.

Imports: This is when goods and services are brought in from other countries to be sold. For example, the UK imports bananas as they are a fruit that does not grow naturally in the UK.

Exports: This is when goods and services are sent to other countries to be sold. For example, lots of cars are made in the UK which are then sent to other countries to be sold.

A government can decide to charge taxes on imports or exports to or from their country - this is known as a tariff.

The money that is raised from a tariff may then be used by that government to fund other things for the people who live in their country.

Tariffs are a common tax in trade, used by many different governments.

What is the reaction?

Canadian Prime Minister Mark Carney is one of the leaders who has said he is unhappy about the new tariffs

Many leaders around the world are concerned about the introduction of higher tariffs.

Canada's Prime Minister Mark Carney has called Mr Trump's announcement a "direct attack" on his country and its car industry.

He added: "We will defend our workers, we will defend our companies, we will defend our country, and we will defend it together."

Rachel Reeves, the UK's chancellor said she's in "extensive" talks to avoid new tariffs being imposed on Britain

Around four out of five cars made in the UK are exported. Of these, around 17% of car exports go to the US.

The US is the UK's second largest export market after the EU according to the Society of Motor Manufacturers and Traders (SMMT).

SMMT boss Mike Hawes said President Trump's announcement is "not surprising but nevertheless disappointing if additional tariffs are to apply to UK-made cars".

UK chancellor Rachel Reeves, who is in charge of decisions about how the government spends and raises money, said the new tariffs would be "bad for the UK, and bad for the US as well".

She added: "We are working intensely these next few days to try and secure a good deal for Britain. I recognise how important this is."