The president has announced new trade tariffs for Canada, Mexico and China, but has not yet done so for the EU or the UK. Donald Trump has delivered on his pledge to introduce new trade tariffs on Canada, Mexico and China in a move that has caused panic for financial markets across the world. The tariffs are set to come into force on Tuesday after the new US president signed a trio of executive orders. He claimed the measures are designed to stop the flow of drugs and immigrants from the country’s two closest neighbours, Canada and Mexico.

Chinese goods will also see a new tariff placed on them, with Mr Trump hinting more countries across the world could make the list in the near future. White House officials have also indicated that the tariffs could grow larger for any country that retaliates, and the president has said tariffs will be coming to the EU “pretty soon”. He has been more vague about whether the UK will be affected. Canada and Mexico have already hit back at the tariffs, triggering what an editorial by the Wall Street Journal has called “the dumbest trade war in history”. Both countries have now moved to introduce counter-tariffs against the US, as all three of the largest North American countries see their economies hit.

Canadian prime minister Justin Trudeau said on Sunday that Mr Trump’s decision "will have real consequences for you, the American people". "The actions taken by the White House split us apart instead of bringing us together," he added, encouraging Canadian citizens to "choose Canadian products and services rather than American ones". Under Mr Trump’s plans, there will be an additional 25 per cent tariff on imports from Canada, with a lower 10 per cent levy on oil, natural gas, electricity and other energy products. Mexican imports will also face an additional 25 per cent tax, while China will see 10 per cent added on.

An import tariff is a tax that is placed on goods that are imported from other countries. These are paid by US companies who are importing the goods – not the foreign exporters. In this case, the amount that needs to be paid will be calculated as a percentage of the product’s value, ranging from 10 to 25 per cent. Mr Trump said the new tariffs will improve the US economy by encouraging businesses to produce their goods domestically, rather than importing them from abroad.

However, many economists point out that the cost of tariffs is generally passed on to consumers as businesses look to offset the cost of them. This could mean massive inflation for certain goods in the US, at least in the short term. Mr Trump’s sudden imposition of the tariffs will also throw many existing international trade deals into turmoil. Across the world, economies are intertwined as goods from certain countries are imported to others, often in massive quantities.

There are also many products that the US will struggle to suddenly – or ever – produce as efficiently as its neighbours. Avocados from Mexico, for instance, are commonplace in the US. The new tariff on the country could see the price of these increase rapidly in US grocery stores, as the country is unable to meet demand domestically. While the president has said new tariffs on the EU will “definitely happen”, he has been more vague in regard to the UK.

He told reporters on Sunday “it might happen”, saying the UK is “out of line” but he is sure it can be “worked out”. Prime minister Sir Keir Starmer, he added, “has been very nice”. He said: “It will definitely happen with the European Union, I can tell you that, because they’ve really taken advantage of us. We have over $300 billion deficit. 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.”.

Mr Trump’s comments have sparked a slump in the UK and European stock markets as traders pre-empt the impacts of possible US tariffs on the continent. If the UK was not spared from the introduction of new tariffs, however, it would not be as difficult for its economy as for countries like Canada or Mexico. This is because most of the UK’s exports to the US are services, like banking and consulting, which are not subject to tariffs.

But they would be coming at a time when the UK is struggling to see economic growth. The newly announced tariffs are already threatening to have an indirect impact, as a likely slowdown in global trade volumes is sure to depress economic growth. Mr Trump’s actions could also put ministers in a tricky diplomatic situation. Roger Barker, head of policy at the Institute of Directors, said: “Tariffs are the last thing the UK needs, given our fragile economic position and dismal levels of business confidence.”.