Tomorrow, US President Donald Trump will impose tariffs of 25% on Mexico, 25% on Canada and 10% on China.

Mr Trump had been using the threat of tariffs to ensure greater cooperation from the countries on stopping illegal immigration and the smuggling of chemicals used for fentanyl.

It is not yet clear whether the import taxes would include any exemptions on products such as oil.

A BBC News report says China, Canada and Mexico are the top US trading partners, accounting for 40% of the goods imported into the US last year.

Fears are now rising that the new steep levies could kick off a major trade war as well as push up prices in the US.

Canada and Mexico have already said that they would respond to US tariffs with measures of their own, while also seeking to assure Washington that they were taking action to address concerns about their US borders.

Tariffs are an import tax on goods that are produced abroad.

Taxing items coming into a country makes them more expensive – the intention is to encourage persons to buy cheaper local products instead, thereby boosting a country’s economy.