President Donald Trump has opted to delay the introduction of China-specific tariffs on his first day in office, instead ordering his administration to address unfair trade practices globally and investigate whether Beijing has complied with the deal signed during his first term. The new direction, as outlined in a fact sheet seen by Bloomberg News, aims to reverse what Trump’s team considers the “destructive impact of globalist, America-last trade policy.” The fact sheet further calls for federal agencies to look into currency manipulation by other nations, emphasizing the administration’s commitment to reducing reliance on foreign nations for essential supply chains while reinvigorating the U.S. industrial base.
This decision to hold off on targeting China immediately marks a significant shift for the new administration, suggesting a more cautious and negotiating approach. According to sources familiar with the decision, Trump’s delay signals his eagerness to cut a new deal with Chinese President Xi Jinping rather than proceeding with the hard-line tariffs he had promised during his campaign. While Trump’s initial campaign rhetoric included threats of up to 20% tariffs on all imported goods and 60% on Chinese products, as well as a 25% duty on all goods from Canada and Mexico, his first actions in office reflect a more strategic and deliberate approach.
The delay in implementing tariffs comes as a relief to several companies that had feared immediate imposition of the duties. However, some insiders cautioned that Trump has been known to quickly change his mind, meaning the tariffs could be reinstated in the coming weeks or months. Despite this uncertainty, the decision on Monday signals a shift from the fiery rhetoric of the campaign trail to a more measured strategy.
In addition to delaying tariffs, Trump is set to direct his cabinet secretaries to assess the impact of the US-Mexico-Canada Agreement (USMCA) on American workers and businesses. His administration plans to evaluate whether continuing participation in the agreement is in the country’s best interest. The USMCA replaced the North American Free Trade Agreement (NAFTA) during Trump’s first term, and he has often referred to it as “the best deal ever negotiated.”
Additionally, Trump announced that he could sign as many as 100 executive actions on his first day in office, which will include measures aimed at curbing inflation and cutting regulations, particularly those related to oil and gas production. One of the more novel proposals involves the study of creating an external revenue service—a new agency that would focus on collecting tariff revenue—though it remains unclear how this would differ from the current federal system.
The announcement of Trump’s tariff delay had an immediate impact on the markets. The dollar fell sharply, with a Bloomberg gauge of the greenback showing a loss of about 1.2%, on track for its largest daily decline since November 2023. Investors had speculated that a trade war, with tariffs targeting foreign nations, could hurt global economies more than the U.S. and lead to a stronger dollar due to its status as a safe-haven currency. With the announcement, U.S. equity futures climbed, reflecting investor optimism that Trump’s approach may alleviate some of the economic tensions in the near term.
Trump’s tariffs have already had a major impact on the U.S. economy. In his first term, the self-proclaimed “tariff man” imposed duties on about $380 billion worth of imports. While these tariffs were designed to reduce the U.S. trade deficit and bring manufacturing jobs back to the country, the effectiveness of such measures remains a subject of debate. Economists have raised concerns that tariffs may not significantly close the trade deficit or revitalize U.S. manufacturing in the long term. In the short term, however, tariffs are likely to lead to a stronger dollar, higher import costs, and increased government revenues.
The future of U.S. tariffs remains uncertain, with Trump’s team signaling that they will continue to assess the situation and potentially act if further negotiations with China and other countries do not yield the desired results. For now, the delay in imposing China-specific tariffs reflects the president’s desire to adopt a more calculated approach to trade while exploring broader global reforms.