Trump Outlines Plans for Sweeping Trade Tariffs
President Trump's first day back in office was marked by the absence of immediate action on tariffs, his signature economic initiative. However, he made it clear that substantial new tariffs are on the horizon.
Potential Tariffs on Mexico and Canada
Trump stated that he is considering imposing a 25% tariff on imports from Mexico and Canada. He indicated that this could occur as early as February 1st.
Tariffs on China
While Trump declined to provide details on potential tariffs against China, he affirmed that they are under consideration. He suggested that tariffs could be implemented if China does not approve a TikTok divestiture deal.
Broader Trade Policy
Trump signed an executive order establishing an "America First Trade Policy." This order directs his administration to identify unfair trade practices and recommend appropriate actions to address them.
Market Reaction
Trump's initial move on tariffs met with a mixed market reaction. While US stock markets were closed on Monday, S&P 500 futures rose, while the US dollar index declined initially before spiking again following Trump's evening comments.
Experts' Perspective
Experts believe that the delay in enacting tariffs is a temporary measure. They predict a fight over trade coming in the future, with China being the most challenging area.
Potential Legal Actions
Trump could potentially invoke the International Emergency Economic Powers Act to implement tariffs, which would grant him wide authority but also potentially open him to legal challenges. He could also use other legal routes, such as Section 301 and Section 232 tariffs, which are more legally tested.
External Revenue Service
Trump expressed plans to establish an External Revenue Service to handle the revenue generated by the expected tariffs.