President Donald Trump has suspended for 30 days the hefty tariffs on Mexico and Canada that he threatened after last-minute negotiations with the two US neighbours. He can point to concessions on border and crime enforcement as a victory. But Canada's Justin Trudeau and Mexico's Claudia Sheinbaum also can claim political wins. A trade war that would send economic shockwaves through North America and beyond is on hold - for now. So who blinked first and what happens next? Trump brinkmanship appears to pay off By Courtney Subramanian, BBC News, Washington DC President Trump's high-stakes confrontation with the United States' closest trading partners appears to have paid off, with both Mexico and Canada agreeing to stricter border security and taking bigger steps to address fentanyl trafficking. The strategy to leverage the US economy to force concessions from other countries notches a win for Trump's "America first" agenda, allowing him to follow through on core domestic issues without American consumers feeling the sting of the economic consequences of a continental trade war. His tariff playbook is hardly new. Trump's tariffs on steel and aluminium during his first term prompted backlash from Mexico, Canada and the European Union, but economists say those measures were more limited in scope. This time, Trump has promised sweeping tariffs on goods from Mexico and Canada, and China, which is still set to see a 10% tariff increase on goods starting at midnight on Tuesday. But it remains unclear whether Trump will follow through on his threats to Canada and Mexico once the 30-day deadline is up. That uncertainty stirs fears that could see businesses reducing their reliance on American markets, holding off on investing in building new factories or hiring workers until the trade stand-off becomes more clear. Lame-duck Trudeau pulls off a trade truce By Jessica Murphy, BBC News, Toronto That was not a January Arctic blast from the north - it was a widespread sigh of relief from Canadian politicians and business leaders at the 30-day pause on US tariffs. While the threat of tariffs remains, Canadian Prime Minister Justin Trudeau can claim a political win: a temporary truce in what was shaping up to be a devastating trade war. Canadian politicians have been scrambling to figure out what exactly would satisfy Trump - a situation not helped by Canada's domestic politics, with Trudeau wrapping up his last weeks in power as a lame-duck prime minister. The border security measures announced on Monday aren't all new. In December, Canada announced C$1.3bn ($900m; £700m) in measures that included efforts to disrupt the fentanyl trade, new tools for law enforcement and enhanced co-ordination with US law enforcement. Canadian surveillance drones and two Black Hawk helicopters recently began patrolling the boundary between the two countries. Officials have cited those efforts for weeks to show they are taking Trump's border concerns seriously. A new element appears to be the appointment of a "fentanyl tsar" and a C$200m intelligence directive to fight organised crime and fentanyl. One question that remains is what this means for the future of the Canada-US relationship. The partnership between the allies has been deeply shaken by Trump's economic threats. Mexico's Sheinbaum buys herself time By Will Grant, BBC Central America and Cuba Correspondent, Mexico City Throughout this trade crisis, President Claudia Sheinbaum has called for "cool heads" and "calm". Even on Friday, she said she was confident of a last-minute reprieve from the 25% tariffs on Mexican goods. And so it proved, following an early morning telephone call with President Trump. Announcing the agreement soon after, she could barely wipe the smile from her face and her supporters have heralded what they see as a masterclass in how to negotiate with Donald Trump. Yes, she agreed to send National Guard troops to the border to focus on fentanyl-smuggling, but crucially she secured what she wanted from Trump, too. As well as the obvious – a pause on tariffs – she also got Trump to "promise" the US would do more to tackle the traffic of high-powered weapons from the US into Mexico, to prevent them from ending up in the arms of cartel gunmen. But she also bought herself another vital commodity: time. She now has several weeks to build on the points agreed in that phone call and turn the temporary hold on tariffs into a permanent one. The expectation is that now Secretary of State Marco Rubio will visit Mexico soon to discuss these matters and a joint group on fentanyl will be established with Mexican and US health and security officials. If in fact Sheinbaum does manage to prevent further trade hostilities, it will go down as the first significant victory of her new government, having only been in office since October. And it may set the tone for future interactions with President Trump and his administration.

President Donald Trump has agreed to hold off imposing 25% tariffs on Canada and Mexico for 30 days, pulling the North American neighbours back from the brink of a potentially damaging trade war. After last-minute calls with Trump, Canadian Prime Minister Justin Trudeau agreed to reinforce his country's border with the US to clamp down on migration and the flow of the deadly drug fentanyl. Earlier, Trump made a deal with Mexican President Claudia Sheinbaum. She agreed to reinforce the northern border with troops. In return the US would limit the flow of guns into Mexico. But a US tariff of 10% on Chinese imports has come into effect, after a deadline of 00:01 EST (05:00 GMT) on Tuesday passed. Shortly after, Beijing announced it was imposing retaliatory tariffs on a raft of American products, including 15% on coal and liquefied natural gas and 10% on crude oil and agricultural machinery. Trump earlier said he planned to speak on the phone to his Chinese counterpart soon. He described the 10% import taxes as the "opening salvo" and said they could become "very, very substantial" if no agreement is made. Monday's breakthrough with Canada and Mexico came as they prepared retaliatory tariffs on American goods. After two phone calls on Monday, Trump and Trudeau posted on social media that they had reached a temporary agreement on securing the border that would avoid tariffs for at least 30 days. Both leaders portrayed the plan as a win. "As president, it is my responsibility to ensure the safety of ALL Americans, and I am doing just that. I am very pleased with this initial outcome," Trump wrote on his social media site Truth Social. Trudeau said Canada was implementing a $1.3bn (£1bn) border plan that included nearly 10,000 frontline workers and more resources to halt the flow of fentanyl, a synthetic drug 50 times stronger than heroin, which Trump has cited as a major concern. The prime minister also said Canada would appoint a "fentanyl czar" and launch a joint strike force with the US to combat crime, fentanyl and money laundering. Much of the border security plan had already been announced by Canada in December. It includes enhanced co-ordination with US law enforcement, increased information sharing, limiting traffic at the border, and the deployment of drones and Black Hawk helicopters for surveillance. The news came just hours after Trump paused a separate tariff on Mexican goods in exchange for that country sending 10,000 National Guard troops to its border with the US. President Sheinbaum broke the news on X, writing she had had a "good conversation with great respect for our relationship and sovereignty" with her US counterpart. Trump described his phone conversation with the Mexican leader as "very friendly". In 2019, Mexico's government agreed to send 15,000 soldiers to its northern frontier to avoid tariffs from the first Trump administration.

A RAF veteran who suffered a ruptured brain aneurysm has overcome her fear of leaving her hometown to represent Team UK at the upcoming Invictus Games. Sara Howarth, 51, had been serving in the RAF for 17 years but in 2014 her brain injury left her with uncontrollable epilepsy, speech difficulties and a fear of exercise. However, Miss Howarth, of Burnham-on-Crouch, Essex, has been training with the Royal British Legion (RBL) since July and is set to compete at the games, which start in Vancouver and Whistler, Canada, on Sunday. Despite her condition and anxiety about the effects of exercise on her recovery, she is set to compete in wheelchair curling, alpine skiing, and indoor rowing. The Invictus Games, a multi-sport competition for wounded or sick military personnel and veterans, was founded by Prince Harry. Miss Howarth, who will set off for Canada on Thursday, said: "I was scared of trains, traveling; I was scared of leaving Burnham, and that was my life. "It's been 10 years since my brain exploded and I have had various challenges through that, including speech, which is still a bit dodgy. The second one was epilepsy, which is still uncontrollable." The former flight-lieutenant said her career was inspired by her father, who also served. Miss Howarth said she convinced herself she would not be selected for the week-long games, so being chosen to compete was a "bit of a wow moment." Miss Howarth told BBC Essex: "I feel excited; it is also very scary. "The RBL's approach has not been about medals, it's about the journey getting there. "It has been a huge journey for me. I was scared to get on a rowing machine, I couldn't remember skiing and wheelchair curling is absolutely superb; it's like chess on ice. "I feel like a new person, if that makes sense. I've got a brilliant coach. "It's not about your speed and whether you get down the mountain first; it's about why you're there." The RBL is a charity providing financial, social and emotional support to members and veterans of the British Armed Forces, their families and dependents. It has also provided funding and facilitates Team UK at the Games. Lou Assioun, Team UK manager at the RBL, said Miss Howarth was someone who "doesn't mind stretching their comfort zone and trusting the process".

A few hours after President Donald Trump announced that he would impose steep tariffs on Canada, hockey fans in the capital Ottawa booed the Star-Spangled Banner during a National Hockey League game against a visiting US team. On Sunday, during a National Basketball Association game between the Toronto Raptors and the Los Angeles Clippers, it happened again, continuing throughout the song and almost drowning out the 15-year-old singer's arena performance. The vocal displeasure from usually respectful fans is a clear sign of Canadians' deep dismay at Trump's move to hit its nearest ally with punitive taxes, which threaten to spark an unprecedented trade war on the North American continent. The 25% tariffs imposed by Trump on all Canadian imports into the US - with a lower 10% levy on energy - are set to take effect on Tuesday. And they come as President Trump doubles down on his push - no longer dismissed as a joke - for Canada to join America and become the 51st state. Are you in Canada? Have you witnessed anything similar? Please share your experiences. While many economists project the tariffs will also drive up costs for Americans on everyday essentials, from gas to groceries, Canada is the more exposed trade partner. If they last for months, the country could tip into a painful economic recession. Anger is building - and with it, a desire to mount a fightback that has been echoed by political leaders in the country of 40 million. "Many among us will be affected by this, and we will have some hard times. I ask you to be there for each other," said Prime Minister Justin Trudeau in a Saturday evening address. "Now is the time to choose Canada." Some Canadians have already heeded the calls for solidarity. On social media, guides have circulated on how to avoid American-made products. One local grocery store in Toronto even began labelling its Canadian yogurt for shoppers, according to an image posted by Toronto doctor Iris Gorfinkel on X. Others have stated they will be cancelling travel plans to the US, or forgoing visiting there altogether. "Yesterday, in response to Trump tariffs, we cancelled our family March break to the US," wrote Seth Klein, a Canadian author, on Bluesky on Sunday. "Took a small hit on cancelled train tickets, but it needed to be done." In some Canadian provinces - namely Ontario, the largest by population - American booze will be pulled off the shelves indefinitely starting on Tuesday. This is in addition to a total of C$155bn ($105bn; £86bn) of American goods that Canada has said it will tariff in retaliation, including vegetables, clothing, sports equipment, perfume and other items. Goods originating from Republican-led states, like Florida orange juice, are specifically being targeted. The US imports more of its oil from Canada than any other country, and Trudeau's government has signalled "all options remain on the table" for further retaliation. A 'destabilising' moment for Canada Trump's follow-through on his threat of steep tariffs - which were long speculated to be a negotiation tactic to get concessions on border security - have bewildered Canadians, who have enjoyed close economic, social and security ties to the US for decades. "It's a shock," Michael Ignatieff, the former leader of Canada's Liberal Party, told the BBC. "We're into a new world, in which the question on whether you can trust America becomes the fundamental question in foreign policy for every country." Pierre Poilievre, leader of Canada's opposition Conservative Party, called the tariffs on Sunday "massive, unjust and unjustified." "Canada is the United States' closest neighbour, greatest ally and best friend," he said, noting that Canada fought alongside the US in two world wars, as well as in Korea and Afghanistan. "There is no justification whatsoever for this treatment." Prime Minister Trudeau questioned in his Saturday address why the US would target Canada instead of looking to "more challenging parts" of the world. A portion of his speech was directly addressed to Americans, and he too, pointed to a history of shared bloodshed. "We have fought, and died, alongside you," Trudeau said. Thomas Juneau, a professor at the University of Ottawa with a focus on national security, told the BBC that Trump's tariffs "undoubtedly represent an earthquake in Canada-US relations." "This is extremely destabilising for Canada," Prof Juneau said. "As a country, we have massively benefited from our extremely close trade and security partnership with the US for decades." While the trade battle would likely force Canada to look for partners elsewhere, it ultimately can't escape geography, he said. It will remain reliant on the economic superpower next door. "That is why Canada must absolutely now focus on salvaging the relationship as much as possible," Prof Juneau said. An unclear, costly fight ahead The big unknown remains how long the US will keep the tariffs in place, and what steps Canada could take to appease the Trump administration, which has said it expects action on cross-border fentanyl trafficking and illegal migration. TD Economics projects that the longer the tariffs remain in place, the worse the impact will be. Canada could enter a recession in five to six months, and its unemployment rate could hit more than 7%. Theo Argitis, managing director of the Ottawa-based public affairs firm Compass Rose Group, said the unknowns had left Canada no choice "but to hit (Trump) back hard." "At the end of the day, we don't even really know why he's doing this," Mr Argitis told the BBC. Trump says the flow of fentanyl, a highly potent and deadly drug, into the US from Canada and Mexico, is one key reason. US officials say the levies will remain in place "until the crisis is alleviated." In response, the Canadian government has noted that less than 1% of fentanyl and illegal border crossings into the US come from Canada. It has offered to spend an additional C$1.3bn to secure the US-Canada border But Trump has also spoken publicly about his frustration with the trade deficit between Canada and the US, and more broadly his view that tariffs could be a source of revenue for Washington's coffers. On Sunday, he wrote on Truth Social that the US does not need Canadian products, and said the US pays "hundreds of billions of dollars to subsidize Canada." "Without this massive subsidy, Canada ceases to exist as a viable country," Trump wrote, before repeating his view that Canada should instead become a US state. He has warned that the White House will enact harsher penalties on Canada should it choose to retaliate. For now, Canada has chosen to try and inflict some targeted pain on its more powerful neighbour, even if the economic scales are tipped against it. "We prefer to solve our disputes with diplomacy," Trudeau told his country on Saturday. "But we are ready to fight when necessary."

Donald Trump's talk of applying new tariffs to goods from America's biggest trade partners has sparked months of uncertainty for business owners. On Saturday, the president made good on his threats, ordering a new 25% tax on shipments from Mexico and Canada and raising existing tariffs on goods from China by 10%. But that has not stopped the questions. "Is it for a day, is it a political flex or is it something that will last for four years?" asked Nicolas Palazzi, the founder of Brooklyn-based PM Spirits. He runs a 21-person business that imports and sells wine and spirits, about 20% of which come from Mexico. Trump's orders set in motion threats that the president has discussed for months, striking at shipments from America's top three trade partners, which together account for more than 40% of the roughly $3tn goods the US imports each year. Canadian oil and other "energy resources" will face a lower 10% rate. But otherwise, there will be no exceptions, the White House said. Trump said the tariffs were intended to hold Canada and Mexico accountable for promises to address illegal immigration and drug trafficking. The measures go into effect on 4 February and are to remain in place "until the crisis is alleviated," according to the orders. If the plans were not a surprise, they still presented a potentially stunning blow to many businesses, especially for those in North America. The three countries have become tightly linked economically after decades of free trade under a treaty signed in the 1990s, known then as Nafta and updated and renamed under the Trump administration to USMCA. The growth of mezcal in the US, brought in by businesses like Palazzi's, has been part of this shift. Since 2003, consumption of tequila and mezcal has roughly tripled, increasing at a rate of more than 7% each year, according to Distilled Spirits Council, a trade group. Overall since the 1990s, trade in spirits between the US and Mexico has surged by more than 4,000% percent, said the organisation, which issued a statement after the president's announcement warning that the tariffs would "significantly harm all three countries". For months, Palazzi has been fielding nervous questions from his suppliers in Mexico, who are typically small, family owned businesses and may not survive if the tariffs are prolonged. If it sticks, he said the 25% tax on the bottles of mezcal, tequila and rum he brings in will push up prices - and sales will drop. "Definitely this is going to impact the business negatively. But can you really plan? No," he said. "Our strategy is roll-with-the-punches, wait and see and adapt to whatever craziness is going to unfold." Economists say the hit from the tariffs could push the economies of Mexico and Canada into recession. Ahead of the announcement, Dan Kelly, president of the Canadian Federation of Independent Businesses, described the looming tariffs from the US, and expected retaliation, as "existential" for many of his members. "Look, we get that the government has got to respond in some fashion …. But at the same time we urge the government to use caution," he said, comparing tariffs on imports to chemotherapy: "It poisons your own people in order to try and fight the disease." "It's going to have an effect everywhere," said Sophie Avernin, director of De Grandes Viñedos de Francia in Mexico, noting that many Americans own Mexican alcohol brands and Modelo beer is actually owned by a Belgian company. Trump, who has embraced tariffs as a tool to address issues far removed from trade, has dismissed concerns about any collateral damage to the economy in the US. But analysts have warned the measures will weigh on growth, raise prices and cost the economy jobs - roughly 286,000, according to estimates by the Tax Foundation, not including retaliation. Those in the alcohol business said the industry had already been struggling to emerge from the shadow of the pandemic and its after-shocks, including inflation, which has prompted many Americans to cut back on dining out and drinking. Smaller firms, who typically have less financial cushion and ability to swallow a sudden 25% jump in cost, will bear the brunt of the disruption. "I'm pretty frustrated," said California-based importer Ben Scott, whose nine-person business Pueblo de Sabor brings in brands from Mexico such as Mal Bien and Lalocura. "There's just a huge cost that's going to affect so many people in ways other than they're paying a couple bucks more for a cocktail, which doesn't sound like a tragedy." Fred Sanchez has spent years pushing to expand his business, Bad Hombre Importing, a small California-based importer and distributor of Mexican agave-based spirits like Agua del Sol, and was recently working on deals in New York and Illinois. But his potential partners started hesitating as Trump's tariff talk ramped up last year. Now, instead of expanding, he is contemplating selling off his stock of liquor and possibly shutting down. He said he had little capacity to absorb the jump in costs and saw little scope for raising prices in the current economy. "25% is just not something that we can realistically pass onto the consumer," he said. Sanchez said he believed that Trump might be using tariffs as a negotiating tactic, and the tax could be short-lived. Still, for his business, damage is already done.

Canada has announced retaliatory tariffs against the US, in a move that marks the beginning of a trade war between the neighbouring countries. Prime Minister Justin Trudeau set out "far-reaching" tariffs of 25%, affecting 155bn Canadian dollars' worth ($106.6bn; £86bn) of American goods ranging from beer and wine, to household appliances and sporting goods. The move matches US President Donald Trump 25% levy on Canadian and Mexican imports to the US - and an additional 10% on China - over his concerns about illegal immigration and drug trafficking. Trudeau said he would "not back down in standing up for Canadians", but warned of real consequences for people on both sides of the border. "We don't want to be here, we didn't ask for this," he said at a news conference late on Saturday. The Canadian prime minister added that tariffs on 30bn-worth US goods would come into force on Tuesday and another 125bn in 21 days to give Canadian firms time to adjust. Trudeau's response targets items including American beer, wine, bourbon, fruits and fruit juices, vegetables, perfumes, clothing and shoes, as well as household appliances, sporting goods and furniture. Lumber and plastics will also face levies and non-tariff measures are also being considered are related to critical minerals and procurement. Economists have warned the introduction of the import taxes by the US, and the response from Canada, as well as Mexico and China, could lead to prices rising on a wide range of products for consumers. A tariff is a domestic tax levied on goods as they enter a country, proportional to the value of the import. The prospect of higher tariffs being introduced on imports to the US has been concerning many world leaders because it will make it more expensive for companies to sell goods in the world's largest economy. Christopher Sands, director of the Wilson Center's Canada Institute, told the BBC that tit-for-tat tariffs between the US and Canada were "mutually assured destruction" and they would impact people's lives very quickly. He said there would be no adjustment time as US Treasury Secretary Scott Bessent had recently proposed: "Just a massive hit that's going to make a lot of people's lives a lot tougher, very quickly." But the taxes are a central part of Trump's economic vision. He sees them as a way of growing the US economy, protecting jobs and raising tax revenue - and in this case, pushing for policy action. Canada, Mexico and the US have deeply integrated economies, with billions of pounds worth of manufactured goods crossing the borders daily. 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. The White House said on Saturday the implementation of tariffs was "necessary to hold China, Mexico, and Canada accountable for their promises to halt the flood of poisonous drugs into the United States". But Trudeau pushed back on the suggestion the shared border posed a security concern, saying less than 1% of fentanyl going into the US comes from Canada. He added less than 1% of illegal migrants entered the US through the border and that tariffs were "not the best way we can actually work together to save lives" Trump has indicated he is ready to escalate the duties further if the countries retaliate to his tariffs, as Canada has done. Prior to the tariffs announcement, Canada has pledged more than $1bn to boost security at its shared border with the US. Trudeau said on Saturday had not spoken to Trump since he had taken office. Mark Carney, the former head of Canada's and England's central banks, told BBC Newsnight on Friday that the tariffs would hit economic growth and drive up inflation. "They're going to damage the US's reputation around the world," said Carney, who is also in the running to replace Trudeau as leader of Canada's Liberal Party.

Canada, Mexico and China have vowed to respond to sweeping new tariffs to their exports to the US announced by President Donald Trump. Trump said a levy of 25% on Canadian and Mexican imports as well as an additional 10% tax on Chinese goods would come into force on Tuesday. Canadian energy faces a lower 10% tariff. The US president said the move was in response to his concerns about illegal immigration and drug trafficking - two of the main promises on which he was elected. In response, both Canada and Mexico said they were preparing similar tariffs on US goods, while China added it would take "necessary countermeasures to defend its legitimate rights and interests". The implementation of tariffs and the subsequent retaliation could mark the start of a new era of global trade wars. Economists have warned the introduction of the import taxes by the US, and the responses from other countries, could lead to prices rising on a wide range of products, from cars, lumber, and steel to food and alcohol. China, Mexico and Canada to retaliate in kind - follow reaction Consumers in all countries could see an increase in the cost of living if businesses decide to pass on higher costs to customers, with US industry groups already raising the alarm. But Trump has indicated he is ready to escalate the duties further if the countries retaliate. "Today's tariff announcement is necessary to hold China, Mexico, and Canada accountable for their promises to halt the flood of poisonous drugs into the United States," the White House said in a statement on X on Saturday. Trump posted on his Truth Social platform: "This was done through the International Emergency Economic Powers Act (IEEPA) because of the major threat of illegal aliens and deadly drugs killing our Citizens, including fentanyl." How countries respond to Trump's tariffs is what matters next Will Donald Trump’s tariffs hurt US consumers? Canada hits back, warning people will suffer China ready for new US tariffs A tariff is a domestic tax levied on goods as they enter the country, proportional to the value of the import. They are a central part of Trump's economic vision. He sees them as a way of growing the US economy, protecting jobs and raising tax revenue - and in this case, pushing for policy action. Together, China, Mexico and Canada accounted for more than 40% of imports into the US last year. Canada, Mexico and the US have deeply integrated economies, with billions of pounds worth of manufactured goods crossing the borders daily. In its announcement, the White House accused Mexico's government of having "an intolerable alliance" with Mexican drug trafficking organisations. In her response, Mexican President Claudia Sheinbaum called allegations that the Mexican government had alliances with criminal organisations "slander". Sheinbaum called on the US to do more to clamp down on the illegal flow of guns south to arm the cartels. Her country is willing to work with the US, she said. "Problems are not resolved by imposing tariffs, but by talking." She instructed her economy minister to respond with tariff and non-tariff measures, which are expected to include retaliatory tariffs of 25% on US goods into Mexico. Canada has already announced retaliatory tariffs against the US, with Canadian Prime Minister Justin Trudeau matching the 25% imposed on his country. He set out "far-reaching" tariffs would affect 155bn Canadian dollars' worth ($106.6bn; £86bn) of American goods ranging from beer and wine, to household appliances and sporting goods. Non-tariff measures being considered are related to critical minerals and procurement, although Trudeau did not offer more detail. "We don't want to be here, we didn't ask for this," he said. "But we will not back down in standing up for Canadians." The Canadian prime minister pushed back on the suggestion the shared border posed a security concern, saying less than 1% of fentanyl going into the US comes from Canada. He also added less than 1% of illegal migrants entered the US through the border. 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. China said it "firmly opposes" the tariffs, but has not yet announced any retaliatory measures. The 10% tax on its imports to the US will be added over and above tariffs already imposed on China by Trump in his first term and by President Joe Biden. "Trade and tariff wars have no winners," said a spokesperson at China's Washington embassy. Trump has acknowledged there could be "some temporary, short-term disruption" a as a result of tariffs. The car manufacturing sector could be especially hard hit. Parts cross the US, Canadian and Mexican borders multiple times before a final vehicle is assembled. TD Economics suggested the import taxes could push up the average US car price by around $3,000, while the National Homebuilders Association said housing costs could increase. The Canadian Chamber of Commerce said the levies would have "immediate and direct consequences on Canadian and American livelihoods" and will "drastically increase the cost of everything for everyone". The Farmers for Free Trade said with many US farmers already struggling, "adding tariffs to the mix would only exacerbate the situation across much of rural America". But the US Retail Industry Leaders Association, which includes big names such as Home Depot, Target and Walgreens among its more than 200 members, expressed hope tariffs could still be averted. The White House, explaining on Saturday why it was targeting its top trading partners, said Mexican cartels were responsible for trafficking fentanyl, methamphetamine and other drugs. It said tariffs on Canada would remain until it "co-operates with the US against drug traffickers and on border security". Lastly, it said "China plays the central role in the fentanyl crisis" with exports of the lethal synthetic painkiller. Both the northern and southern US borders have reported drug seizures, though amounts at the border with Canada are considerably lower than those with Mexico, according to official data. US border agents seized 43lbs (19.5kg) of fentanyl at the northern border between October 2023 and last September, compared to more than 21,000lbs (9,525.4kg) at the southern border. Still, recent reports from Canadian intelligence agencies suggest a growing number of transnational organised crime groups are manufacturing drugs in Canada. Ashley Davis, a Republican lobbyist for businesses, who represents major US companies, including Walmart and Boeing, and has been involved in discussions about tariffs, told the BBC's World Business Report she thought Trump would pull back on the tariffs in North America if he could point to progress on the issues he has raised as complaints – especially immigration. "You have to remember – the border and China are the two biggest issues that Americans voted him on in the elections in November. Anything he can do to claim wins on that, I think he's going to do," she said.

US President Donald Trump will impose tariffs on Saturday of 25% on Mexico, 25% on Canada and 10% on China, says the White House. But Trump said on Friday that Canadian oil would be hit with lower tariffs of 10%, which could take effect later, on 18 February. The president also said he planned to impose tariffs on the European Union in the future, saying the bloc had not treated the US well. White House press secretary Karoline Leavitt said the Canada and Mexico duties were in response to "the illegal fentanyl that they have sourced and allowed to distribute into our country, which has killed tens of millions of Americans". Trump has also repeatedly said the move was to address the large amounts of undocumented migrants that have come across US borders as well as trade deficits with its neighbours. Ms Leavitt told a news briefing at the White House on Friday: "These are promises made and promises kept by the President." During the election campaign, Trump threatened to hit Chinese-made products with tariffs of up to 60%, but held off on any immediate action on his first day back in the White House, instead ordering his administration to study the issue. US goods imports from China have flattened since 2018, a statistic that economists have attributed in part to a series of escalating tariffs that Trump imposed during his first term. Booze, oil and orange juice: How Canada could retaliate Trump's tariffs hit China hard before - this time it's ready Earlier this month, a top Chinese official warned against protectionism as Trump's return to the presidency renews the threat of a trade war between the world's two biggest economies - but did not mention the US by name. Addressing the World Economic Forum in Davos, Switzerland, Ding Xuexiang, Vice Premier of China, said his country was looking for a "win-win" solution to trade tensions and wanted to expand its imports. China, Canada and Mexico are the top US trading partners, accounting for 40% of the goods imported into the US last year, and fears are rising that the new steep levies could kick off a major trade war as well as push up prices in the US. Canadian Prime Minister Justin Trudeau said on Friday: "It's not what we want, but if he moves forward, we will also act." Canada and Mexico have already said that they would respond to US tariffs with measures of their own, while also seeking to assure Washington that they were taking action to address concerns about their US borders. The BBC has reached out to the Chinese embassy in the US for comment. If US imports of oil from Canada and Mexico are hit with levies it risks undermining Trump's promise to bring down the cost of living. Tariffs are an import tax on goods that are produced abroad. In theory, taxing items coming into a country means people are less likely to buy them as they become more expensive. The intention is that they buy cheaper local products instead - boosting a country's economy. But the cost of tariffs on imported energy could be passed on to businesses and consumers, which may increase the prices of everything from petrol to groceries. Around 40% of the crude that runs through US oil refineries is imported, and the vast majority of it comes from Canada. On Friday, Trump agreed tariff costs are sometimes passed along to consumers and that his plans may cause disruption in the short-term. Mark Carney, the former head of Canada's and England's central banks, told BBC Newsnight on Friday that the tariffs will hit economic growth and drive up inflation. "They're going to damage the US's reputation around the world," said Carney, who is also in the running to replace Prime Minister Trudeau as leader of Canada's Liberal Party.

Mark Carney, the frontrunner to be the next Canadian prime minister, has said his country is "going to stand up to a bully" after US President Donald Trump said he would unveil tariffs of 25% on Canada. Speaking exclusively to BBC Newsnight, 59-year-old Carney said Canada will "match dollar for dollar the US tariffs". As well as levying a 25% tariff on Canadian imports on Saturday, the White House has announced tariffs of 25% on Mexico and 10% on China. Carney, who announced his run for leader of Canada's governing Liberal Party in January, is the former governor of the Bank of Canada and the Bank of England. He is currently one of five candidates in the running to succeed Prime Minister Justin Trudeau - and has so far secured the largest support base among Liberal MPs. The leadership race will conclude on 9 March. The winner will replace Trudeau - who announced his intention to resign in January after nine years in office - both as prime minister and party leader. Canada is then required to hold a federal election to elect a new government on or before 20 October, with the Liberal party currently trailing their Conservative rivals in the polls. In response to the tariff announcement, Carney told Newsnight that "President Trump probably thinks Canada will cave in". "But we are going to stand up to a bully, we're not going to back down," he said. "We're united and we will retaliate." The former Bank of England governor said the tariffs are "going to damage the US's reputation around the world". "They're going to hit growth. They're going to move up inflation. They're going to raise interest rates," he said. He added that it's the "second time" in less than a decade that the US has "in effect, ripped up a trade agreement with its closest trading partner". In 2020, towards the end of Donald Trump's first term, the US-Mexico-Canada Agreement (UCMCA) came into effect - effectively an update to Nafta, the agreement between the three countries which had been in place since the 1990s. Economists have suggested the newly imposed tariffs could have a devastating immediate impact on Canada's economy - while also leading to higher prices for Americans. Tariffs are a central part of Trump's economic vision. He sees them as a way of growing the US economy, protecting jobs and raising tax revenue. Outgoing Prime Minister Trudeau has said Canada's response will be "forceful" and "immediate" to the new tariffs. Trump said on Friday that Canadian oil would be hit with lower tariffs of 10%, which would take effect later, on 18 February. The president also said he planned to impose tariffs on the European Union in the future, saying the bloc had not treated the US well.

President Donald Trump's pick to lead the Commerce Department has told US lawmakers that Canada and Mexico can avoid blanket tariffs if they close their borders to fentanyl. "As far as I know, they are acting swiftly, and if they execute it, there will be no tariff," Howard Lutnick said on Wednesday during a confirmation hearing before senators. Trump has said he is considering imposing 25% tariffs on both countries by 1 February. He has previously tied the tariffs threat to ending illegal migration and drugs crossing into the US through its southern and northern borders. He called the levy linked to border security were "not a tariff per se - it's a domestic policy action". Later on Wednesday, Canadian Foreign Minister Mélanie Joly met with Secretary of State Marco Rubio to discuss the fentanyl crisis, but told reporters after the meeting that the fate of the tariffs was still unknown. "We need to continue to engage. The ultimate decisionmaker is President Trump," she said, adding that working with the Trump administration was "unpredictable". Joly added that she would be meeting with lawmakers in Washington until Friday and was "cautiously optimistic" that the matter could be resolved. She said that Canada was prepared to retaliate with its own tariffs if necessary. Lutnick, the billionaire chief executive of financial firm Cantor Fitzgerald, said other levies on Canada are to be decided by the end of March or in April, once a review of US trade relationships commissioned by Trump is complete. He also expressed a preference for assessing tariffs "country-by-country" rather than by product. "We are treated horribly by the global trade environment, everybody has higher tariffs, non-tariff trade barriers and subsidies," he said. "We can use tariffs to create reciprocity, fairness and respect." In December, Canada promised to implement a $1.3bn ($900m; £700m) set of new security measures along the country's US border. Trump selects financier Howard Lutnick as commerce secretary Has Trump promised too much on US economy? It includes plans to disrupt the fentanyl trade, as well as stronger coordination with US law enforcement. They also brought in a new aerial surveillance task force with Blackhawk helicopters and drones. The overdose epidemic claims around 80,000 lives a year in North America. Both the northern and southern US borders have reported drug seizures, though amounts at the border with Canada are considerably lower than those with Mexico, according to official data, US border agents seized 43lbs (19.5kg) of fentanyl at the northern border between October 2023 and last September, compared to more than 21,000lbs (9,525.4kg) at the southern border. Canadian border agents seized 10.8lbs (4.9 kg) of outbound fentanyl on its side of the border between 1 January and 31 October of last year, most destined for the Netherlands. Still, recent reports from Canadian intelligence agencies suggest a growing number of transnational organised crime groups are manufacturing drugs in Canada. A new report from the Criminal Intelligence Service of Canada paints a web of organised criminal gangs operating in North America: Asian crime groups importing precursor and finished drugs to the region, Mexican cartels supplying cocaine, meth and fentanyl, and US gangs supplying Canadian criminals with illegal firearms. Canadian law enforcement has also reported fentanyl originating from Mexican organised crime groups in the Canadian drug supply, though the "magnitude and nature" of the operation isn't clear.