Chapter 1: What are tariffs and how have they impacted global trade?
Let's take a look at where we are with tariffs. In the UK, this is the Marketplace Morning Report from the BBC World Service. I'm Gideon Long. Good morning. There's one word that's dominated the headlines this year, and it begins with T. Tariffs. Countries around the world have been grappling with the US import taxes that were central to President Trump's trade strategy.
It's been a bumpy ride for many. So how are countries meeting the challenges they're facing? Let's start with Mexico. Here's the BBC's Will Grant. It's been a complex year for Mexico in terms of its relationship with the U.S. and the Trump administration. Mexico is the U.S. 's biggest trading partner.
And by and large, Mexico's escaped the worst of the tariffs imposed on other nations, in part by upping the fight on fentanyl, as President Trump had demanded. However, the relationship isn't entirely fixed. I'm speaking to you from my local covered market. Here there are real effects of how tariffs have hit Mexico. Take the tomatoes at this stand.
They're still the subject of a 17% tariff, what's called an anti-dumping tariff, over a dispute to do with Mexican farmers undercutting Californian producers. More essential than that, though, is water. The US has threatened to impose significant sanctions on Mexico unless it upholds its side of a water-sharing agreement which dates back to the 1940s.
The difficulty is that Mexico is meant to send water from an area trapped in its worst drought for many decades. So there's still much to deal with between these two neighbours as they move into 2026, when, of course, they'll co-host the FIFA World Cup together. Will Grant there. China spent much of the year at the top of the White House list of trade adversaries.
Other countries in the Asia-Pacific region have faced a balancing act of maintaining relationships with both Beijing and Washington, while also shoring up their own markets. In Singapore, the BBC's Surinjana Tiwari has the details. US President Donald Trump's aggressive tariff policies have shaken up the Asia-Pacific this year. Take China.
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Chapter 2: How is Mexico navigating the challenges of U.S. tariffs?
Trump and President Xi Jinping met in South Korea and reached a deal that eased some of the tension. China agreed to suspend export controls on rare earths and ease some tariffs on US goods like soybeans. The US in turn lowered some tariffs on Chinese products Many Asian countries depend on US-China trade.
Indonesia and Malaysia, for example, could see industries like textiles and footwear hit by slower global demand. But China has also found new markets. Exports topped $1 trillion in 2025. Japan and South Korea are diversifying too, sending vehicles, electronics and chips to Southeast Asia and Europe.
Vietnam faced some of the highest US tariffs, around 20% after negotiations, because of its role in US supply chains. Economists say the country remains resilient though. Across Asia more broadly, businesses are nervous. The uncertainty of tariffs is That was Surinjana Tiwari. Let's do the numbers. 22%.
That's how much India's exports to the US jumped in November compared to the year before, despite the country facing a steep 50% tariff rate. And Switzerland received a welcome holiday gift in the form of a 15% tariff this month, down from 39% as announced in August. a key trade policy of the Trump administration was to end the tax exemption of parcels under a value of $800, the de minimis rule.
So what's happening now, four months on? The BBC's William Lee Adams has more. And across the globe, postal services are pausing deliveries to the U.S. as Washington prepares to end its long-held tariff exemption on low-value parcels. Until August, anyone could send a parcel to the United States tariff-free, so long as the value of the item was less than $800.
The exemption was known as de minimis, that's Latin for small things. Businesses from around the world took advantage of the rule. Almost 1.4 billion packages entered the U.S. duty-free last year. With two of China's largest online retailers, Xi'an and Timu, each sending hundreds of millions of parcels to the states annually, the de minimis rule found itself in the sights of President Trump.
De minimis is a big deal. It's a big scam going on against our country, against really small businesses. U.S. Commerce Secretary Howard Lutnick explained why the tax exemption had to go. Foreign countries were sending in little packages for free and knocking out our mom and pop businesses across America.
The most immediate impact of the end of the de minimis exemptions was on businesses outside of the U.S. Here's Jess Van Dan, a jewelry maker based in Australia. 30 to 40% of my jewelry business was in the U.S., and now I've had to stop that entire part of my business. And I'm not the only one. There's so many people who have even higher percentages.
In removing the tax exemption, the White House said it wanted to level the playing field for U.S. companies. So have they seen a difference since the changes? Madeline Knutson, who runs a mail order business out of Minot in North Dakota, says she's much more careful about where she buys her products from.
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