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Donald Trump did not impose any new trade tariffs on the first day of his second term, as markets had feared, but the US president laid out the official blueprint for an “America First trade policy”.
A President’s Memo Calls for federal agencies to correct “unfair trade practices” and identify “currency manipulators.” Trade agreements with China, Canada, Mexico and other partners are under review.
The message: The Trump administration was ready to use all means to re-engineer trade flows to its advantage. Here are five takeaways from the opening salvo of Trump’s trade agenda.
Firm commitment ‘sooner than tariffs’
Trump mentioned tariffs only three times in his inaugural address, calming investors and trading partners who had been warned to expect tariffs “on day one.” But he outlined plans to set up an external revenue service to collect duties, signaling serious plans to raise revenue from trade.
Josh Lipsky, a senior director at the Atlantic Council think-tank, said the tariff decision may be delayed, but not abandoned. “The president was worried about the market’s reaction on Tuesday and he didn’t want it to derail his first day.”
The president’s “America First” memo provided a framework for the new agenda, which announced a series of reviews of unfair trade practices, the causes of the U.S. trade deficit, and whether competitors are unfairly manipulating and taxing U.S. businesses.
Trump too His speech is clear and repeated threats to impose 25 percent tariffs on Canadian and Mexican imports despite the countries’ free trade agreement. Asked about the possibility of imposing universal tariffs on anyone doing business with the United States, the president said: “We can. But we are not ready for that yet.”
“The experience of the first term is to expect tariffs sooner rather than later,” Lipsky warned, adding that the administration still does not have a full economic team and wants to lay a solid legal foundation for any action.
Look at the neighbors first
Trump appears to be prioritizing action on the US’s closest trading partners, saying he is preparing to implement tariffs on Canada and Mexico as soon as February 1.
Trump had no qualms about hitting U.S. allies during his first term, citing national security concerns for imposing tariffs on steel and aluminum imports. But by going public on Canada’s side, analysts say he is signaling that no country is safe from the self-proclaimed “customs man.”
Trump’s trade memo ordered a review of trade relations with Canada and Mexico by April 1 (the later date of Trump’s tariff warning, which the president did not explain). Preparations will then begin for a comprehensive review of the USMCA trade agreement in July 2026.
One priority highlighted in the trade memo is Trump’s determination to cut “illegal immigration and the flow of fentanyl,” particularly from Mexico and Canada.
Many supply chains for US manufacturers, Especially car manufacturersCount on operations in three countries and those businesses could pressure Trump to withdraw his threats.
On Tuesday, Canadian Prime Minister Justin Trudeau said his country was taking Trump’s proposals seriously and will react If the tariff is imposed, Mexico’s President Claudia Sheinbaum said that it will focus on “decree instead of speech”.
A systematic overhaul including towards China
Other parts of the president’s policy cover ways to enable a sweeping shift in Washington’s dealings with its trading partners.
“I don’t expect a change in margins,” said Kelly Ann Shaw, a partner at the law firm Hogan Lovells and a former trade adviser to Trump. “But rather a review of the entire panoply of trade and economic tools that resulted in significant moves.”
A wide range of initiatives initiated by the memo include investigations into currency manipulation. Trump has previously accused China of devaluing the renminbi to raise the price of its exports.
The president also directed his trade representative, Jamie Greer, to review U.S. trade deals, including a limited deal first struck during the Trump administration that was intended to boost exports to China.
Several sections of the memo direct various US economic officials to investigate US economic relations with China more broadly, including a review of existing tariffs on Chinese goods.
Greer has also been asked to identify potential new deals with significant market access for “American workers, farmers, ranchers, service providers and other businesses,” indicating that a second Trump administration may be open to forging new trade deals.
“It’s a pretty big deal. It makes me think there’s going to be a trade bill in Congress,” said Everett Eisenstat, a partner at the Washington law firm Square Patton Boggs. “Once trade bills start moving, they tend to be very significant, and laws don’t change very often. .”
Arms trade to achieve various goals
Trump has linked the tariffs to other policy goals beyond reducing the trade deficit.
He has vowed to impose tariffs on EU goods unless members of the bloc buy more American oil and gas. Trump also suggested on Monday that tariffs could be imposed on China An agreement on the ownership of TikTok. He said he would impose tariffs on Chinese imports of up to 100 percent if Beijing failed to agree to a deal to sell at least 50 percent of the app to a U.S. company.
Anahita Thoms, head of international trade at German law firm Baker Mackenzie, said Trump was using the tariff threat to maximize his leverage.
“I don’t think he’s bluffing but he’s using it as a negotiating tool,” he said. Now “every country will know what concessions to make to be on good terms”.
Risk of threatened collateral damage. “Tariffs will be inflationary,” Thomas said, adding that Trump “doesn’t want to do anything that has a negative impact on inflation.”
‘Global’ tariffs and global impact
US imports from countries such as Vietnam and Mexico increased during Trump’s first term. This reflects the trend of Chinese manufacturers seeking to bypass US tariffs by exporting to America through third countries.
Trump’s trade team realizes this. His memo called on Greer to consider additional tariff changes to address “diversion through third countries.”
The memo asked officials to look at whether a “global supplemental tariff” could be used to remedy a “large and persistent” annual U.S. trade deficit. This suggests that something similar to the universal tariffs promised by Trump on the campaign trail may yet emerge.
His threat could spur other countries to increase trade with each other. Just from December, The EU deal has been clinched The Mesoamerican Group of South American countries and Mexico are resuming talks with Malaysia after more than a decade.
Speaking to the Financial Times, Malaysian Prime Minister Anwar Ibrahim said the global trade system would survive. “initial shock” Trump’s trade barriers.
