Trump Ponders Tariffs on Mexico, Canada, China
On his first day back in the White House, President Trump signaled the potential for significant tariff increases, particularly against Mexico, Canada, and China.
Mexico and Canada
"We are thinking in terms of 25% on Mexico and Canada," Trump said. He indicated that these tariffs could be implemented as early as February 1.
China
Trump declined to provide details on potential tariffs on China, saying that negotiations are ongoing. However, he hinted that tariffs remain on the table, possibly even concerning the social media app TikTok.
America First Trade Policy
Trump signed an executive order establishing an "America First Trade Policy." This order mandates a review of unfair trade practices by other countries and recommends appropriate actions.
Initial Delay and Market Reaction
Despite Trump's tariff threats, no immediate action was taken on his first day in office. This move was seen by some as an attempt to avoid market volatility. However, it led to a mixed market reaction, with S&P 500 futures rising initially but later declining after Trump's evening comments.
Upcoming Tariffs
Experts believe that tariffs are still in the offing, potentially leading to market volatility. Trump could invoke the International Emergency Economic Powers Act, Section 301 tariffs, or Section 232 tariffs as legal avenues.
External Revenue Service
Trump also proposed the establishment of an External Revenue Service, stating that the anticipated tariffs would generate substantial revenue for the Treasury.