Donald Trump did not impose any new trade tariffs on the first day of his second term, as markets feared, but the US president outlined the official plan for an “America First” trade policy.
A presidential note called on federal agencies to address “unfair trade practices” and identify “currency manipulators.” Trade agreements with China, Canada, Mexico and all other partners were subject to review.
The message: the Trump administration was prepared to use any means to reorganize trade flows to its advantage. Here are five takeaways from the opening salvos of Trump’s trade agenda.
Firm commitments in favor of “customs tariffs as soon as possible”
Trump mentioned tariffs only three times in his inaugural address, appeasing investors and trading partners who had been warned to expect levies from day one. But he spoke of plans to create a foreign revenue service to collect customs duties, indicating serious plans to increase revenue from trade.
Josh Lipsky, senior director at the Atlantic Council think tank, said tariff decisions would likely be delayed, but not abandoned. “The president was worried about the market reaction on Tuesday and he didn’t want it to spoil his first day.”
The president’s “America First” memo provided a framework for the new agenda, announcing a series of reviews into unfair trade practices, the reasons for U.S. trade deficits and whether competitors are manipulating currencies and unfairly tax American businesses.
Trump too sharpened his rhetoric and repeated threats to apply 25 percent tariffs on Canadian and Mexican imports, despite the free trade agreement between the two countries. Asked about the possibility of imposing universal tariffs on anyone doing business with the United States, the president replied: “We can do it. But we are not ready for that yet.
“The first-term experience is to expect tariffs sooner rather than later,” Lipsky warned, adding that the administration does not yet have a full economic team and wants to establish a solid legal foundation for any measure.
Focus on neighbors first
Trump appears to be prioritizing actions targeting the United States’ closest trading partners, saying he is preparing to implement tariffs on Canada and Mexico as early as February 1.
Trump had no qualms about hitting U.S. allies during his first term, citing national security concerns to impose tariffs on steel and aluminum imports. But by coming out publicly in favor of Canada, analysts say he signals that no country is safe from the self-proclaimed “tariff man.”
Trump’s trade memo ordered a review of trade relations with Canada and Mexico by April 1 (a date later than Trump’s tariff warning, which the president did not explain). Preparations would then begin for a full review of the CUSMA trade deal in July 2026.
One of the priorities highlighted in the trade memo is Trump’s determination to reduce “illegal immigration and flows of fentanyl,” particularly from Mexico and Canada.
Numerous supply chains for American manufacturers, especially car manufacturersrely on operations in all three countries and these companies could pressure Trump to rescind his threats.
On Tuesday, Canadian Prime Minister Justin Trudeau said his country was taking Trump’s proposals “seriously” and would answer if tariffs were imposed, while Mexican President Claudia Sheinbaum said it would focus on “decrees rather than speech”.
A systematic overhaul, including towards China
Other parts of the president’s policy cover ways to bring about global change in Washington’s relations with its trading partners.
“I don’t expect any marginal adjustments,” said Kelly Ann Shaw, a partner at the law firm Hogan Lovells and a former Trump trade adviser. “But rather a review of the entire range of commercial and economic tools which results in significant actions.”
The broad range of initiatives launched by the memo includes an investigation into currency manipulation. Trump has previously accused China of undervaluing the renminbi to increase the value of its exports.
The president also asked his trade representative, Jamieson Greer, to review U.S. trade deals, including a limited one made under the first Trump administration that aimed to boost exports to China.
Several sections of the memo call on various U.S. economic officials to take a broader look at U.S. economic relations with China, including a review of existing tariffs on Chinese goods.
Greer was also asked to identify possible new agreements providing meaningful market access for “American workers, farmers, ranchers, service providers and other businesses,” indicating that the second Trump administration may be open to entering into new ones. trade agreements.
“It’s a pretty huge deal. It makes me think that at some point Congress is going to come up with a trade bill,” said Everett Eissenstat, a partner at the Washington law firm Squire Patton Boggs. “Once trade bills start evolving, they tend to be very large and the statutes don’t change that often.”
Arming commerce to achieve different objectives
Trump has linked tariffs to other policy goals beyond reducing trade deficits.
He has promised taxes on European goods unless the bloc’s members buy more U.S. oil and gas. Trump also suggested Monday that tariffs on China could depend on an agreement on the ownership of TikTok. He said he would impose taxes on Chinese imports of up to 100 percent if Beijing fails to agree on a deal to sell at least 50 percent of the app to a U.S. company.
Anahita Thoms, head of international trade at law firm Baker McKenzie in Germany, said Trump was using tariff threats to maximize his influence.
“I don’t think he’s bluffing but he’s using it as a negotiating tool,” she said. From now on, “each country will know what concession it will have to make to be on good terms”.
Threats risked causing collateral damage. “Tariffs would be inflationary,” Thoms said, adding that Trump “wouldn’t want to do something that would have a negative impact on inflation.”
“Global” tariffs and global implications
U.S. imports from countries like Vietnam and Mexico picked up during Trump’s first term. This reflects the trend of Chinese manufacturers seeking to circumvent US tariffs by exporting to America via third countries.
Trump’s trade team has taken notice. His memo calls on Greer to consider additional tariff changes to combat “circumvention via third countries.”
The memo asks officials to consider whether an “overall additional tariff” could be used to address the United States’ “large and persistent” annual trade deficit. This indicates that something similar to the universal tariff Trump promised during the election campaign could yet emerge.
His threats could also encourage other countries to increase trade with each other. Since December only, the EU has concluded agreements with the Mercosur group of countries from South America and Mexico, while resuming negotiations with Malaysia after more than a decade.
Speaking to the Financial Times, Malaysian Prime Minister Anwar Ibrahim said the global trading system would survive the “initial shock” Trump’s trade barriers.