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Trump’s Trade Strategy: A Cautious Approach on Inauguration Day
During a rally in Washington on January 19, 2025, President-elect Donald Trump addressed supporters as he prepared for his second inauguration. On the eve of this significant event, Trump’s administration is ready to implement a series of executive actions, although imposing new tariffs on international trading partners will not be among them initially.
Instead, Trump plans to unveil a comprehensive trade memorandum that aims to instruct federal agencies to investigate and evaluate unfair trade practices and currency manipulation, with a particular focus on key partners including China, Canada, and Mexico. Notably, the memorandum does not propose any immediate tariff hikes.
The Wall Street Journal was the first to report on Trump’s decision to refrain from enacting tariffs on his first day in office. This reflects a potential shift in his trade strategy compared to the more aggressive stance he promoted during his campaign.
The Trump team has been considering a phased approach to tariffs, potentially implementing gradual increases of 2% to 5% monthly on imports from various countries, as reported by Bloomberg News last week. This strategy indicates a shift from his previous proposal of universal tariffs, which included a 20% tax on all imports and an even steeper 60% levy on Chinese goods.
Concerns have been raised by many economists regarding Trump’s initial trade strategy, specifically the protectionist policies that could potentially inflate production costs and increase prices for consumers. This apprehension comes as the global economy seeks stability following inflation fluctuations experienced during and after the pandemic.
— Additional reporting contributed by CNBC’s Megan Cassella.
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