What is a tariff and who pays it - as Trump increases tariffs on all steel and aluminium imports to 25%

The US President, 78, says the taxes will help create factory jobs across the US. Stubborn Mr Trump removed all exemptions from his 2018 tariffs on the metals, in addition to increasing the tariffs on aluminium from 10%.

His moves, based off a February directive, are part of a broader effort to disrupt and transform global commerce. The President has separate tariffs on Canada, Mexico and China, with plans to also tax imports from the European Union, Brazil and South Korea by charging "reciprocal" rates starting on April 2.

Mr Trump told CEOs in the Business Roundtable on Tuesday the tariffs were causing companies to invest in US factories. Mr Trump told the group: "The higher it goes, the more likely it is they’re going to build. The biggest win is if they move into our country and produce jobs. That’s a bigger win than the tariffs themselves, but the tariffs are going to be throwing off a lot of money to this country."

The President on Tuesday threatened to put tariffs of 50% on steel and aluminium from Canada, but he chose to stay with the 25% rate after the province of Ontario suspended plans to put a surcharge on electricity sold to Michigan, Minnesota and New York. The UK steel industry says the world leader's tariffs "couldn't come at a worse time" as it is thought the UK government is unlikely to immediately retaliate to the huge import tax.

Gareth Stace, the director general of trade association UK Steel, said: "President Trump must surely recognise that the UK is an ally, not a foe. Our steel sector is not a threat to the US but a partner to key customers, sharing the same values and objectives in addressing global overcapacity and tackling unfair trade.

"These tariffs couldn't come at a worse time for the UK steel industry, as we battle with high energy costs and subdued demand at home, against an oversupplied and increasingly protectionist global landscape. What's more, the EU is also pushing ahead with trade restrictive action that will amplify the impact of US tariffs."

What are tariffs and who pays it?

A tariff is a tax paid when goods are sent from one country into another. They are a tax on imports. In the United States, tariffs are collected by Customs and Border Protection agents at 328 ports of entry across the country.

Trump insists tariffs are paid for by foreign countries. In fact, it is importers — American companies — that pay tariffs, and the money goes to the U.S. Treasury. Those companies typically pass their higher costs on to their customers in the form of higher prices. That’s why economists say consumers usually end up footing the bill for tariffs.

Tariffs can hurt foreign countries by making their products pricier and harder to sell abroad. Foreign companies might have to cut prices — and sacrifice profits — to offset the tariffs and try to maintain their market share in the United States.