No one-day tariffs from Trump, but says Canada, Mexico could get jobs Feb 1 By Reuters
By David Lawder, Andrea Shalal and Jarrett Renshaw
WASHINGTON (Reuters) – President Donald Trump did not immediately impose tariffs on Monday as he had previously promised but said he was considering imposing 25% duties on imports from Canada and Mexico on February 1 due to illegal immigration and fentanyl entering the US.
When he was sworn into office, Trump stopped short of imposing tariffs on two of the US’s neighbors, but ordered federal agencies to investigate the ongoing US trade deficit and unfair trade practices and allegations of foreign spending.
In a presidential memo, Trump ordered the departments of Commerce and Treasury and the US Trade Representative to investigate the economic and national security risks of a large trade deficit “and recommend appropriate measures, such as additional global tariffs, or other policies, to correct that deficit. .”
Investors and foreign capital have been bracing for a one-day tariff that could derail long-standing trade deals, but Trump’s trade memo actually called for more research that could set back future tariff actions.
The recovery sparked a rally in global stocks and sent other currencies higher against the dollar. US stock markets were closed on Monday but will reopen on Tuesday.
Asked by reporters at the White House if he would impose tariffs on all goods sent to the United States, Trump said: “We may. But we’re not ready for that yet.”
Asked about the tariffs in Canada and Mexico, he said he was thinking about 25% because both countries are said to allow “a large number of people” and fentanyl into the US.
Trump also said he wants to reverse the US trade deficit with the European Union, through tariffs or energy exports.
Tariffs were a theme throughout the inauguration day, with Trump saying the measures would generate “tremendous amounts” of revenue as his administration works to rebuild American industry. He said they will be collected by a new unit called the External Revenue Service.
“The tax is going to make us rich as hell,” Trump later told his supporters Capital One (NYSE:) Arena in Washington. “It will bring back the businesses of our country that left us.”
CHINESE ACTS
Trump’s trade memo called on USTR to review China’s performance under the “Phase 1” trade deal it signed with Beijing in 2020 to end a two-year tariff war.
The deal requires China to increase its imports of US goods by $200 billion over two years, but Beijing has failed to meet the targets as the COVID-19 pandemic hits.
USTR will determine China’s compliance and recommend appropriate actions “up to and including the imposition of tariffs or other measures as necessary,” it said.
The memo also asks USTR to recommend possible changes to China’s Most Favored Nation trade status and to investigate other Chinese economic practices that may be “unreasonable or discriminatory and may burden or impede US trade” — language associated with Section 301 investigations such as that too. he often imposed tariffs on Chinese goods during Trump’s first term and continued with former president Joe Biden.
The new president also signed an executive order delaying the enforcement of a ban on the short-form video app TikTok, but said he may impose tariffs on China if Beijing does not approve a potential deal with the US and TikTok.
During his campaign, Trump vowed to impose higher tariffs of 10% to 20% on global exports to the US and 60% on goods from China to help reduce the trade deficit that has exceeded $1 trillion annually.
Such duties could tear up long-standing trade agreements, including the US-Mexico Canada Agreement (USMCA) and increase supply chains and increase costs, according to trade experts.
The memo calls on USTR to launch a public consultation to prepare for the 2026 USMCA review, and to assess its impact on American workers, farmers, ranchers, and service providers.
Some industry groups and trade advocates in Washington had expected Trump to use the International Emergency Economic Powers Act, a law with broad powers to control imports, to impose broader tariffs.
But Trump will work more closely with Congress on tax measures, a senior administration official said, downplaying differences of opinion in his newly formed cabinet over how quickly to end Trump’s promised tariffs.
The source said Trump’s Commerce Secretary nominee, Howard Lutnick, and his Treasury Secretary nominee, Scott Bessent, will move forward with Trump’s trade plan soon, but did not give a specific timeline.
MEETING OF REST
The US dollar fell sharply in the news when compared to a basket of currencies of its major trading partners, with particularly large increases in the euro, the Canadian dollar, the Mexican peso and . The MSCI index of global stock markets rose. US stock markets are closed for the Martin Luther King Jr. Day holiday.
Canadian Finance Minister Dominic LeBlanc told reporters in Ottawa that it would be a good move for the US to study trade relations between the two countries rather than impose tariffs. Industry groups have also expressed relief at the lack of immediate action.
“American businesses would appreciate a deliberate approach that identifies unfair trade practices and helps Americans succeed in the global economy,” said Jake Colvin, president of the National Foreign Trade Council, which represents dozens of major U.S. companies on trade issues.
Trade analysts say they still expect Trump to push ahead with global tariffs early in his administration.
