
Photo by John Guccione
Donald Trump has announced plans to implement a 10% tariff on goods imported from China, starting as soon as February 1. He also mentioned that he is contemplating tariffs on imports from the European Union. On his second day in office, Trump ordered an investigation into US-China trade, stating that any penalties on Chinese products would be linked to their shipment of fentanyl to Mexico and Canada. He remarked, “Other countries are big abusers too; it’s not just China,” while discussing trade relations with the EU. Trump highlighted the significant $350 billion deficit with the European Union, claiming they treat the US poorly and will face tariffs as a result.
The alert was issued a day after the new US president informed reporters of his consideration to implement a 25% tariff on imports from Mexico and Canada, which are America’s top trading partners, starting in February. During his election campaign, Trump threatened to impose heavy tariffs on various nations, initially proposing a 60% tariff on imports from China. Although he later suggested a reduced 10% tariff, China’s currency and stock markets experienced declines during trading on Wednesday. The CSI 300 index and the Shanghai Composite index both ended nearly 1% lower, marking their largest drop in almost two weeks and interrupting a brief period of market stability. Meanwhile, Hong Kong’s Hang Seng index fell by 1.8%.
The offshore yuan, free from the restrictions imposed by Chinese financial regulators, has also fallen in value against the dollar.
In other news, Trump has enacted numerous executive orders that have rolled back policies from the Biden administration, halting various infrastructure, transportation, and energy initiatives.
One such order, titled “Unleashing American Energy,” directed agencies to “immediately pause the disbursement of funds.” According to US investors, this has jeopardized $300 billion in potential green infrastructure investments, as initially reported by the Financial Times.
The funds in question were allocated through two significant laws enacted during Joe Biden’s presidency: the Inflation Reduction Act and the bipartisan infrastructure law. This includes approximately $50 billion in Department of Energy loans that have already been approved, along with an additional $280 billion in loan applications currently under review, as analyzed by the Financial Times. In his initial hours back in the White House, Trump announced a series of policy changes, including a proposal to double the tax rate for foreign nationals and international companies.
This measure is intended as a response to nations that impose what are deemed “discriminatory” taxes on American businesses operating overseas, aligning with Trump’s “America First” trade strategy. It is viewed as a potential catalyst for a global conflict over tax policies. The president effectively withdrew from the global corporate tax agreement that the Biden administration negotiated in 2021 with nearly 140 nations. Trump declared that the Organisation for Economic Co-operation and Development’s plan for a global minimum corporate tax rate of 15% “has no force or effect” in the United States.
Trump announced what he described as “the largest AI infrastructure project in history,” a $500 billion collaboration involving OpenAI, Oracle, and SoftBank, which intends to establish a network of data centers throughout the United States. This initiative, named Stargate, is one of the first major business efforts of his second presidency and focuses on building the necessary data centers and computing infrastructure to support artificial intelligence advancements. In a related development, all federal employees in diversity offices have been instructed to take paid leave by Wednesday evening, following the Trump administration’s directive to shut down these programs, as confirmed by White House press secretary Karoline Leavitt.