TNC Daily Open: Spotlight on Trump 2.0 Policies

TNC Daily Open: Rising Treasury Yields Weigh on Stocks

This report is from today’s TNC’s Daily Open, our international markets update. TNC Daily Open keeps investors informed on everything they need to know, no matter where they are.

What To Note Today

America’s 47th President

After taking the oath of office on Monday, President Donald J. Trump immediately started issuing executive orders. He formed the Department of Government Efficiency, or DOGE, directed by Elon Musk, delayed the execution of a rule that would have banned TikTok in the United States for at least 75 days, and granted “full pardons” to those accused of involvement in the attack on the U.S. Capitol on January 6, 2021.

Declaration Of National Energy Emergency

As part of a broad goal to boost fossil fuel production, Trump on Monday declared a national energy emergency and directed the United States to leave the Paris climate agreement. Additionally, he revoked the Biden administration’s several climate objectives, including reaching net-zero emissions by 2050.

Trump Focused On Tariffs

Trump informed reporters on Monday that he is considering levying a 25% tax on Canada and Mexico, with an implementation date of February 1. Additionally, he issued a trade memorandum that, although not imposing additional duties, directed federal agencies to examine trade policy with other countries, including China, Canada, and Mexico.

Biden’s Pardons

Former US President Joe Biden granted preemptive pardons for several family members on Monday, expressing worries that they might be the victims of “baseless and politically motivated investigations.” Additionally, Biden pardoned members of Congress who looked into the Capitol disturbance on January 6, Anthony Fauci, Gen. Mark Milley, and others he claimed were in danger of being “baselessly” singled out for political reasons.

Asian Markets Soar After Inauguration

In honour of Martin Luther King Jr. Day, U.S. markets were closed on Monday. Tuesday saw a little decline in stock futures as Trump suggested possibly imposing tariffs on Canada and Mexico. Tuesday saw an increase in Asia-Pacific markets. The Hang Seng index in Hong Kong increased by about 1%, while the Kospi index in Korea decreased by about 0.1% as the nation’s wholesale inflation rate increased by 1.7% annually in December.

A Repeat Of The First Time?

Others on Wall Street believe that Trump’s second term may impact various asset classes in the same way that it did during his own. To learn more, CNBC Pro examined how a number of assets performed over the first 100 days of Trump’s previous administration and questioned analysts about how those assets might perform going forward.

Bottom Line

Since becoming the 47th president of the United States, Donald Trump has gotten right to work, issuing several executive orders shortly after taking office. Investors will be watching these two key problems.

Tariffs

In October, Trump addressed the Chicago Economic Club, “I think the word ‘tariff’ is the most beautiful word in the dictionary.” Trump stated on Monday that he is considering levying 25% tariffs on Canadian and Mexican imports by February 1. Throughout the campaign, Trump pledged to impose a uniform tariff of up to 20% on all U.S. imports and more than 60% on Chinese goods.

Governments implement tariffs supposedly to safeguard indigenous industry. Businesses that import goods incur a tax, which raises expenses. This encourages them to seek out regional vendors instead.

Companies may find it challenging to move production to local shores due to the global integration of supply chains and the large amount of manufacturing outside the United States. Therefore, it is likely that the consumer will pay more due to the higher costs.

To put it another way, tariffs may increase inflation.

Deportations

Trump promised his supporters at a pre-inauguration rally called the “Make America Great Again Victory Rally” that “the invasion of our country will have come to a halt.” Similar to tariffs, stricter immigration laws or complete deportations are usually implemented for various reasons, including safeguarding the home economy.

The idea is that it will be simpler to get work as there will be fewer applicants for each available position.

However, undocumented immigrants work in numerous sectors of the American economy, including construction and agriculture, where they fill positions that locals don’t want. As demonstrated by Elon Musk’s dispute with Trump supporters over H-1B visas, even legal immigrants are essential to higher-skilled industries like technology.

If trustworthy labour sources disappear overnight, companies will have to increase wages to attract talent, perhaps reintroducing the infamous wage-price cycle.

Other Regulations

Trump has pledged numerous more economic initiatives, including lowering corporation taxes, granting Bitcoin legal status, and reducing subsidies for green energy.

However, tariffs may have the most significant effect on the world’s financial institutions and economy.

[bravepop id="205917" align="center"]
0 0 votes
Article Rating
Subscribe
Notify of
0 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments