Donald Trump has agreed to pause 25% tariffs on goods from Mexico, hours before they were to take effect. His tariffs against Canada and China are still set for Tuesday. We just had a panel of experts answer your questions on this – scroll back to read their answers.
Monday 3 February 2025 20:29, UK
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Throughout the evening, we’ve been bringing you updates as crowds gather outside the headquarters of the US Agency for International Development (USAID).
Our US correspondent James Matthews is outside the building and told our lead politics presenter Sophy Ridge employees were told by email not to turn up to work today.
“This place is going to be shut down, according to Elon Musk, who of course is in charge of DOGE (department of government efficiency) and is the unelected political ally of Donald Trump,” Matthews says.
“This is his brief and his way of cutting back on layers of bureaucracy, as he would have it.”
Trump’s freeze on foreign assistance has already shut down several of USAID’s worldwide aid programmes, including an HIV-AIDS scheme started by George W Bush.
Other programmes that would be shut down provided education to schoolgirls in Afghanistan under Taliban rule.
“This is the first kind of gathering of its sort that I’ve seen, I suppose it’s a frontline of sorts in the fight against radical revolution scenery change,” Matthews adds.
“We’ll see how this evolves and how this develops alongside government policy. I suspect that all of this might end up in the courts, and that will be a challenge, a test of the strength of the courts to deal with.”
Donald Trump’s call with Justin Trudeau is now underway, according to White House press secretary Karoline Leavitt.
The US president has imposed 25% tariffs on imports from Canada, beginning tomorrow.
In response, Canada’s prime minister says his country will impose 25% tariffs on $155bn Canadian dollars (£85.9bn) of US goods.
The two leaders have already spoken about tariffs before this evening’s call.
Leavitt adds there are plans for Trump to speak with Chinese President Xi Jinping in the next 24 hours.
As we reported earlier, crowds have been gathering outside the Washington headquarters of the US Agency for International Development (USAID).
It comes as staff members have been told to stay away after Elon Musk announced Donald Trump had agreed to shut the agency.
Flowers have been laid outside the headquarters, with some bouquets carrying tags reading: “Today it’s us at USAID, tomorrow it’s you.”
We’re just receiving some comments clarifying Elon Musk’s position in Donald Trump’s government.
The multi-billionaire has been described as a “special government employee” by a senior White House official, who added he is not receiving a US paycheck.
The official insisted Musk is following the law, running Tesla and SpaceX while also chairing Trump’s Department of Government Efficiency (DOGE).
Trump has also weighed in, insisting he hasn’t seen a conflict of interest with Musk.
“If there was a conflict, we wouldn’t let Elon work on it,” he added.
We’ve just heard from a group of House and Senate Democrats speaking outside the headquarters for USAID.
Elon Musk has said he and Donald Trump have agreed to close the agency, which currently supports international development.
Congressman Don Beyer calls this “a crime that is unfolding before our eyes”.
He says Musk and his “band of unelected acolytes” at the Department of Government Efficiency (DOGE) have already locked out USAID employees from their offices.
They’ve also “improperly accessed highly classified information” and thrown the agency into chaos “through a concerted campaign of harassment and intimidation of its employees”, he says.
“This is a case of the very worst among us attacking the very best of us,” Beyer adds.
Senator Brian Schatz said he would block Senate votes on Trump’s nominees for diplomatic positions in protest over the president’s USAID directive.
Under the chamber’s rules, one senator can hold up nominations even if the other 99 all want them to move quickly, forcing the Senate to consume many hours of floor time to move nominations or promotions ahead.
By Ed Conway, economics and data editor
What if Britain has, almost entirely by accident, navigated itself into about the best possible position it could be in, as Donald Trump embarks on a trade war with nearly all his economic partners?
I realise this might, at first, sound a little odd. After all, when the world is facing economically-destructive measures (blanket tariffs are invariably value-destructive, in the short run at least) it’s hard to see much in the way of victories.
Moreover, when it comes to Trump, no one, including his own cabinet and staff, can quite predict what will happen next.
Consider the roller-coaster over tariffs in the past few days alone.
Even so, the fact remains that of all the countries and regions in the world, Britain seems much less likely than most to face the kind of peremptory tariffs the president is so keen on.
Earlier, we brought you a warning from Donald Trump over potential tariffs for the European Union (see our 6.47am post).
The US president said new tariffs on the EU will “definitely happen” as he labelled the group “out of line”.
Our chief presenter Mark Austin has been speaking to Chris Southworth, secretary general of the International Chamber of Commerce UK, about this.
“It would be a big problem for Europe. It would also be a big problem for us because 40% of our trade is with Europe,” Southworth explained.
“It is not in any of our economic interests for tariffs to take place. Nobody wins from a tariff war. We must do everything we possibly can to try and avoid that happening.”
Speaking more specifically on the relationship between the UK and the US, Southworth said dialogue is key.
“The answer is to sit around the table and figure a way forward,” he added.
“Is there willingness on our side and on the US side to do trade? Absolutely. But we do need to sit down and have that conversation without the application of tariffs where we all pay a big price.”
By James Sillars, business and economics reporter
It’s been a bruising rather than bloody day for stock markets across Europe.
The prospect of the EU and UK being next in the Trump tariff firing line was looming large for investors.
But some companies were more exposed to the here and now than others, with carmakers bearing the brunt of the losses.
Citroen-to-Vauxhall maker Stellantis and Volkswagen, which have large operations in Mexico in addition to Europe, were among the biggest fallers.
That was despite a temporary tariff truce of at least a month being agreed between Trump and his Mexican counterpart later in the day.
Their stocks still fell by more than 4%. Beer brands were among the other sectors affected.
Stock markets in Europe suffered more generally from a flight from risk, with the prospects for trade war-linked economic harm in sharp focus.
In London, the FTSE 100 closed the session 1% down.
The DAX in recession-hit Germany and CAC in Paris ended the day 1.5% and 1.2% down.
Across the Atlantic, US stock markets are seeing similar declines, with auto producers also losing out.
Tesla, the electric carmaker run by Trump cheerleader Elon Musk, saw its share price decline by more than 6% in early dealing.
That drop later settled around 4.6%.
Away from stocks, a strengthening of the dollar hit currencies broadly, with the Mexican peso and Canadian dollar both down by more than 1%.
The pound was trading flat on the day versus the US currency and almost a cent up against the euro at €1.2051.
We’re now hearing more from Donald Trump on tariffs.
He says the 10% tariffs placed on China, due to come into force tomorrow, could just be the start.
The US president says tariffs will rise against Beijing if America and China can’t make a deal.
At the same time, China’s envoy to the UN has said China is firmly opposed to the “unwarranted increase” in tariffs from the White House.
The envoy added Beijing may be forced to take countermeasures against the US.
Donald Trump has just signed an executive order to create a US sovereign wealth fund.
TikTok was briefly taken offline last month just before a law requiring its Chinese owner to either sell it on national security grounds or face a ban took effect.
Trump signed an executive order after taking office seeking to delay the enforcement of the law by 75 days.
He has said that he was in talks with multiple people over TikTok’s purchase and would likely have a decision on the popular app’s future this month.
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