President Donald Trump signed an executive order on Monday focusing on international trade and hinted at the possibility of imposing tariffs on America’s neighbors in the near future. However, he refrained from immediately implementing new tariffs on his first day in office.
The executive order instructed federal agencies to examine and evaluate unfair trade practices and currency policies with countries such as China, Canada, and Mexico. While the order did not impose any new duties on these nations, Trump mentioned during the signing ceremony that he was contemplating a 25% tariff on Mexico and Canada starting in February. He clarified that he was not yet ready to implement universal tariffs.
In addition to the executive order, Trump announced the creation of the External Revenue Service, an entity responsible for collecting duties on imports from countries subject to tariffs.
The decision to postpone the imposition of tariffs on the first day of his presidency was reported by The Wall Street Journal. This move raised questions about how Trump would follow through on his campaign promise of imposing tariffs, including a proposed 20% tariff on all imports and a 60% tariff on Chinese goods.
Reports have also surfaced indicating that Trump’s team is considering a gradual increase in tariffs on trading partners, with rates potentially rising by 2% to 5% each month under emergency powers.
Critics of Trump’s protectionist trade policies have expressed concerns about the potential impact on production costs and consumer prices, particularly as the global economy seeks to recover from the inflationary pressures of the pandemic.
It remains to be seen how Trump’s trade agenda will unfold in the coming months, as he navigates the complex landscape of international trade relations. Regardless, his executive order marks a significant step towards reshaping America’s trade policy under his administration.
