Trump's First Day Back: Tariffs on the Horizon

President Donald Trump returned to the White House with no immediate action on tariffs, but he hinted at impending significant new duties.

25% Tariffs on Mexico and Canada

During a signing ceremony in the Oval Office, Trump expressed plans for 25% tariffs on imports from Mexico and Canada. He suggested they could be implemented as soon as February 1.

Blanket Tariffs and China

Trump acknowledged that blanket tariffs remain a possibility, while declining to provide details on potential tariffs against China. He confirmed that negotiations are ongoing, but emphasized that tariffs are on the agenda, including as a possible response to the TikTok divestiture deal.

'America First Trade Policy'

On Monday, the President signed an executive order establishing an 'America First Trade Policy.' It directs his administration to identify unfair trade practices by other countries and recommend remedies.

Market Reaction

Despite the initial delay, Trump's comments on tariffs sparked a mixed market reaction. S&P 500 futures rose while the US dollar index spiked.

Potential Enforcement Mechanisms

Trump may utilize various legal mechanisms to implement tariffs, including the International Emergency Economic Powers Act, Section 301, and Section 232 tariffs.

Economic Consequences

Experts predict that market volatility may persist due to potential tariff actions. Analysts anticipate a further rally in the US dollar and equities.

Trump's Inaugural Address

In his inaugural address, Trump vowed to protect American workers through trade system reform. He pledged to use tariffs and taxes on foreign countries to benefit US citizens.

Caution from Experts

While some experts hailed the delay in immediate tariff action, others expressed skepticism about the possibility of lasting restraint. They warn that trade disputes, particularly with China, could escalate.

External Revenue Service

Trump announced plans to establish an External Revenue Service, believing that future tariffs will generate substantial Treasury revenue.