Canada has announced retaliatory tariffs against the US.

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.

Canada’s Prime Minister Justin Trudeau set out “far-reaching” tariffs of 25%, affecting 155bn Canadian dollars’ worth of American goods ranging from beer and wine, to household appliances and sporting goods.

Mr Trudeau insisted that he would “not back down in standing up for Canadians”, but warned of real consequences for people on both sides of the border.

A tariff is a domestic tax levied on goods as they enter a country.

This is the start of of a trade war between the neighboring countries, and Mr Trump has previously indicated that he will escalate the duties further if the countries retaliate to his tariffs, as Canada has now done.