Donald Trump’s first day back in at the White House was one without major action on his biggest economic initiative — tariffs — but he made clear that historic new duties are coming.
"We are thinking in terms of 25% on Mexico and Canada," he said while signing a slew of executive orders in the Oval Office, and added that they could happen soon.
"I think we are going to do it on Feb. 1," he said.
He also suggested that blanket tariffs remain on the table but could be farther off, saying all countries rip off the United States to some extent.
As for China, he declined to offer details on new tariffs for that country, saying that meetings and negotiations are ongoing. But, again, he made it clear that tariffs are on the table — possibly even as the countries discuss what to do about social media app TikTok.
Trump said that "if China didn't approve [a TikTok divestiture deal], we could put tariffs on China" as he signed an order directing the attorney general not to enforce the law banning the social media app for 75 days. TikTok's parent is a Chinese company, ByteDance.
President Donald Trump signs executive orders in the Oval Office of the White House on Monday. (AP Photo/Evan Vucci) ·ASSOCIATED PRESS
During the campaign, Trump vowed tariffs as high as 60% on China and up to 20% on other trading partners. After his victory, he vowed an additional 10% duties on China and 25% on Mexico and Canada.
Trump did sign an order Monday on establishing an "America First Trade Policy" that directed various figures in his administration, including his trade representative, to "undertake a review of, and identify, any unfair trade practices by other countries and recommend appropriate actions to remedy such practices."
The initial delay in actually enacting any tariffs on Trump's first day was a move perhaps designed to avert market volatility, even as a range of experts warned it offered little signal that major trade action isn't still in the offing.
And it appears Trump’s initial move had a mixed market reaction. While US stock markets were closed on Monday, S&P 500 futures were still open for trading and rose while the US dollar index dropped from a nearly two-year high amid signs tariffs would be delayed but then spiked again on Trump's comments Monday evening.
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Trump himself offered a glimpse of his overall plans in his inaugural address, promising to "immediately begin the overhaul of our trade system to protect American workers and families."
"Instead of taxing our citizens to enrich other countries, we will tariff and tax foreign countries to enrich our citizens," he added.
"What he's doing today is he's kicking that can down the road," Jon Hilsenrath, founder of Serpa Pinto Advisory, said in a Yahoo Finance interview before Trump's evening comments.
"I think the markets are going to love the fact that we're not seeing him coming right out on tariffs."
But it was a move that a wide array of experts Monday noted could be short lived.
Others agreed that any deal with China is unlikely to avert what could be a trade war over the coming four years between the world's two largest economies.
“While we are certainly not surprised by Trump’s restraint today, we would however emphasize that we remain skeptical that the US and China will reach any real ‘Phase 2,’” Andrew D. Bishop, a senior partner at Signum Global, wrote in a note.
President Donald Trump gestures during his inauguration ceremony in the rotunda of the United States Capitol on Jan. 20. (SHAWN THEW/POOL/AFP via Getty Images) ·SHAWN THEW via Getty Images
What could still be in the offing
In November, Trump promised specific day one tariff action against Canada and Mexico, saying that on Jan. 20, he would "sign all necessary documents to charge Mexico and Canada a 25% Tariff on ALL products coming into the United States" because of his concerns about drugs and crime.
But it didn’t happen, at least not in the immediate hours after Trump's second swearing-in.
And Trump has not yet outlined the legal parameters of his likely actions to come.
One controversial could be an action that puts a 1977 law called the International Emergency Economic Powers Act — and the sweeping powers it grants — into focus.
Trump and his team have studied the law, which allows a president to invoke its power "to deal with any unusual and extraordinary threat [to US national security or its economy] if the President declares a national emergency with respect to such a threat."
The act then grants the president wide authority and has long been considered the most aggressive opening move for Trump. It’s also one of the most legally untested options at Trump’s disposal, potentially opening it up to legal challenges.
Trump could also invoke other powers such as the so-called Section 301 and Section 232 tariffs. Those routes are more legally tested and sound but could force Trump to act more slowly and perhaps less aggressively.
An analysis Monday from Capitol Economics suggested Trump’s tariffs are coming and that market volatility could follow, even if his first hours back in office came and went with relative calm.
"We suspect that a fair degree of volatility will persist for a while yet," the analysts wrote. "We ultimately expect his first year in office to coincide with a further rally in the US dollar and US equities."
On Monday, the new president also touted his plans for establishing an External Revenue Service because, in his view, the high tariffs that are coming will lead to "massive amounts of money pouring into our Treasury."
Ben Werschkul is a Washington correspondent for Yahoo Finance.
Every Friday, Yahoo Finance's Rachelle Akuffo, Rick Newman, and Ben Werschkul bring you a unique look at how US policy and government affect your bottom line on Capitol Gains. Watch or listen to Capitol Gains on Apple Podcasts, Spotify, or wherever you find your favorite podcasts.
