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US President Donald Trump’s threat to impose fresh tariffs on eight allies opposed to his proposed takeover of Greenland has thrust trade levies back into the spotlight.
Last year, Trump introduced tariffs on goods entering the US from countries worldwide.
He argued then that the move would bolster American manufacturing and create jobs. However, critics cautioned about the potential for higher prices and damage to the global economy.
The US president has also leveraged these taxes to exert influence, as seen with the threatened tariffs on those eight countries – including the UK – over the Greenland issue.
The US Supreme Court is slated to rule shortly on the legality of some of the tariffs introduced by Trump.
Tariffs are taxes levied on imported goods.
Typically, the charge is calculated as a percentage of the good’s value.
For example, a 10% tariff on a $10 product would add $1 to the cost, bringing the total to $11 (£8.17).
The tax is remitted to the government by companies importing the foreign products.
These firms may pass on some or all of the additional cost to their customers, meaning ordinary Americans and other US businesses.
Alternatively, they may choose to reduce their import volume.
Trump asserts that tariffs increase government tax revenue, incentivize consumers to purchase American-made goods, and stimulate investment within the US.
His aim is to reduce the US trade deficit, which is the difference between the value of goods the country imports from other nations and the value of goods it exports.
The president contends that the US has been exploited by “cheaters” and “pillaged” by foreign entities.
Trump has also utilized these taxes to advance other objectives.
For instance, when announcing tariffs against China, Mexico, and Canada, he stated that these countries must do more to curb the flow of migrants and the illicit drug fentanyl into the US.
Trump has now threatened to impose fresh tariffs starting in February on eight countries opposing his proposed acquisition of Greenland.
Many tariffs have been modified or postponed after their initial announcement.
Trump’s tariffs have faced numerous legal challenges due to the manner in which they were implemented.
Instead of seeking Congressional approval for the tariffs, the Trump administration invoked the 1977 International Emergency Economic Powers Act. By declaring an emergency under this law, Trump was able to issue immediate orders and circumvent the established legislative process.
In August 2025, a US appeals court ruled that most of Trump’s tariffs were illegal, but allowed them to remain in effect.
The White House appealed this decision to the US Supreme Court, which began hearing arguments in November 2025.
A ruling is anticipated in the coming weeks.
On 12 January, Trump posted on social media that it would be a “complete mess” if the Supreme Court overturned his tariffs, and he cautioned about the potential complications if businesses were granted the right to claim refunds.
“It would take many years to figure out what number we are talking about and even, who, when, and where, to pay,” Trump stated.
If the Supreme Court does not uphold his tariffs, “WE’RE SCREWED”, the president added.
Negotiations are ongoing with several countries, including America’s top three trading partners.
China, Canada, and Mexico were all warned that they faced particularly high tariffs.
A complex system of varying rates is in place for other countries.
Many of these stem from Trump’s announcement in April 2025 that a “baseline” of 10% would be applied to imports from all countries. Nations deemed the “worst offenders” would face higher rates as retribution for unfair trade practices.
New tariff rates for numerous countries were subsequently introduced in August, following delays to allow for trade discussions.
These include:
On 13 January, Trump announced the US would apply a 25% tariff to countries which continue to trade with Iran, after Tehran cracked down on anti-government protests, with thousands of people feared dead.
On 17 January, the US president said he would impose a 10% tariff on eight countries who are opposed to his proposed takeover of Greenland.
The extra tariff on goods from Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands and Finland would come into force on 1 February, but could later rise to 25% – and would last until a deal was reached.
In June 2025, the UK negotiated a 10% US tariff rate, the lowest so far of any country that has struck a deal with Trump.
It exported about £58bn of goods to the US in 2024 – mainly cars, machinery and pharmaceuticals.
The 10% rate applies to the first 100,000 UK vehicles exported every year – roughly the number of cars sold in 2024. Additional vehicles face the standard 25% tariff.
The agreement also lets the two countries sell beef to each other. Some US ethanol will face 0% tariffs, instead of 19%.
Trump announced “the deal was done” in June, but did not confirm the expected removal of all charges on steel imports from the UK.
The UK is the only country which does not face 50% tariffs on steel and aluminium. It pays 25% instead.
The BBC understands the plan to eliminate tariffs on UK steel exports entirely has now been put on hold.
However, speaking to reporters ahead of his second state visit to the UK in September, Trump said he was “into helping” Britain fine-tune the deal.
Some taxes announced by Trump are on particular products, wherever they are made.
These include:
In addition, Trump ended an exemption for imports valued at $800 (£592) or less.
It means low-cost goods are no longer duty-free – a move affecting millions of packages sent every day, including those from online retailers like Shein and Temu.
The companies shipping the parcels now have to pay duties based on the tariff rate which applies to the country the goods were sent from. Otherwise, for six months, they can choose to pay a fixed fee of between $80 and $200 per package.
On 2 January, the White House confirmed it had slashed proposed tariffs of almost 92% on some imported pasta.
The government had alleged that certain Italian-made goods were being sold at “less than normal value” in the US, undercutting local producers, but reduced the level of the tariffs after what it called constructive engagement with the firms in question.
In November, Trump signed an executive order exempting a range of other food products from tariffs, including avocados, bananas, beef and coffee. The administration said it acted because the specified goods could not be produced in sufficient quantities domestically.
Shoppers have seen price rises for some products, including toys, appliances and furniture as well as certain foodstuffs.
US inflation was 3% in the 12 months to September, having gone up since April, when it stood at 2.4%.
It fell back to 2.7% in November, and remained at that level in December, which was lower than many analysts had expected.
Many firms have said they will pass on the cost of tariffs to US customers, including Target, Walmart and Adidas.
The cost of goods manufactured in the US using imported components is also expected to rise.
For example, car parts typically cross the US, Mexican and Canadian borders multiple times before a vehicle is completely assembled.
Trump was accused of throwing the global economy into turmoil when he announced the first tariffs of his second presidential term.
Although financial markets have since largely recovered, in October 2025 the International Monetary Fund (IMF) said the overall picture remained volatile, and that US tariffs were having a negative effect.
It forecast global growth of 3.2% for 2025, and 3.1% in 2026. That was a slight increase from its July predictions, but still below the 3.3% it had projected for both years before Trump’s measures were announced.
It thinks the US economy will grow by 2% in 2025, and 2.1% in 2026. That’s down from the 2.8% growth recorded in 2024, but still the fastest among the world’s most advanced economies.
The most recent US figures show the economy picked up speed over the three months to September 2025, as consumer spending jumped and exports increased.
The economy grew at an annual rate of 4.3%, up from 3.8% in the previous quarter. That was better than expected, and marked the strongest growth in two years.
Imports – which count against growth – continued to decline during the period.
The MPs says the UK “risks being left behind” if it does not adopt a ban similar to one in Australia.
Europe is split between hitting back at Trump’s tariff threat or holding fire to avoid a damaging trade war.
The conversation follows the US president vowing a 10% levy on the UK and others opposing his annexation of the Danish territory.
The troops are an option should Donald Trump decide to use them to quell anti-ICE protests in the city, an official tells CBS News.
The US president threatens to impose tariffs on countries that oppose his plans to take over the territory.
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