US President Donald Trump has announced fresh import taxes on goods being imported to America in the latest escalation of the global trade war.

The UK has been hit with a 10% tariff on nearly all of its goods being brought into the US, which Trump says is a retaliation to UK tariffs on American goods, but uncertainty remains over the potential impact on British consumers.

Here’s how you and your money could be affected.

The tariffs Trump has just announced will be paid for by the businesses which import goods into the US.

Clarissa Hahn, economist at Oxford Economics, says this means that the initial impact of price rises will be on US consumers, as American firms are likely to pass on the extra costs to their customers.

However, she adds people in the UK could subsequently be affected by the measures, which come into effect on 5 April.

One way is via the value of the pound and exchange rates, which dictate the cost to UK businesses importing goods and raw materials from abroad. If import costs go up, these extra costs could be passed on to consumers through higher prices.

Following Trump’s speech on Wednesday, exchange rates between the dollar and pound fluctuated. If the value of the dollar strengthens as some economists have predicted, import costs could rise for UK firms importing goods.

Higher prices in the UK could also “prompt workers to demand higher wages”, which would further raise costs for businesses, according to Ahmet Ihsan Kaya, principal economist, at the National Institute of Economic and Social Research.

Ms Hahn adds if the UK government decides to retaliate with tariffs of its own on US goods entering the UK, there is a risk UK prices could rise if British businesses pass on extra costs to customers.

However, some economists have suggested prices could also initially fall as a result of Trump’s decision to impose tariffs.

Swati Dhingra, economist and member of the Bank of England’s monetary policy committee, which sets interest rates, has suggested that firms which normally send their goods to the US, may instead send them to countries such as the UK which don’t have such steep tariffs, potentially leading to a flood of cheaper goods in the UK.

“Tariffs of the proposed magnitude are likely to prompt firms that export to the US to lower their prices to retain demand for their products,” she suggests.

British companies exporting goods to the US are set to be the hardest hit from the latest measures.

The UK exported almost £60bn worth of goods to the US last year, mainly machinery, cars and pharmaceuticals. Other industries, which are big exporters to the US, include fishing and electronics.

If US demand for UK products dwindles due to the extra charges importers face, this could hit profit margins and ultimately lead to UK job cuts unless British firms find new customers outside the US.

According to the Institute for Public Policy Research think tank, Jaguar Land Rover and the Mini factory in Cowley, Oxford, appear to be the most exposed to US tariffs on cars.

It says more than 25,000 jobs in the UK car manufacturing industry “could be at risk” with a 25% tariff coming into effect on Thursday, with one in eight UK-built cars exported to the US.

The pharmaceutical industry is also heavily reliant on trade with the US, says Ms Hahn, of Oxford Economics.

The US makes up 40% of AstraZeneca’s sales and 50% of GSK’s. Although both British-headquartered firms have manufacturing facilities in America, raw ingredients for life-saving medicines and vaccines travel between the UK, EU and US. Under tariffs the firms could be hit with multiple tax charges as they cross borders to be developed.

There is also the issue of how tariffs work when they collide with pricing caps that both the NHS and other health organisations set for buying drugs in bulk.

UK interest rates dictate the costs households have to pay to borrow money for things such as mortgages, credit cards and loans. Higher rates also boost returns for savers.

They are currently at 4.5%, but economists are predicting two more rate cuts by the end of the year.

However, the Bank of England highlighted US tariffs as a reason why it avoided cutting rates further last month, saying economic and global trade uncertainty had “intensified”.

If prices are pushed up for long enough to affect the rate of inflation – this could mean interest rates stay higher for longer.

Andrew Bailey, the Bank of England governor, said it was Bank’s job “to make sure that inflation stays low and stable” and that would be “looking very closely” at the impact of tariffs.