Trump's Inauguration: No New Tariffs, Just Trade Reviews

Donald Trump will be sworn in as President-elect on January 20, 2025, and has indicated that on his first day of office, he will not make any new announcements about tariffs. Instead, he will sign a trade memorandum ordering federal agencies to review current trade relationships, particularly with China, Canada, and Mexico. He will not announce any new tariffs on his first day but analyze the current practice of trade and compliance with the existing agreement.

Although Trump has proposed tariffs of 10% on all imports and higher rates on imports from China (60%) and Canada and Mexico (25%), it will not begin doing so now. His administration will investigate unfair trade practices and currency manipulation on the part of these countries. That's a backtracking from what he had initially promised in the campaign - direct action through tariffs. His team seems to be opting for a more gradual approach that might include minor increases in tariffs over time.

Immediately, the market reaction was due to no near-term tariffs. Afterwards, the US dollar declined with the modification in expectations by the traders. There is a worry from economists that the later tariffs would increase cost for producers as well as for consumers, hence negatively impacting economic recovery post-pandemic. Overall, delaying new tariffs is strategically aimed by Trump at managing trade imbalances without shocking the market.