January 20, 2025 at 01:33PM
The first market-moving headline of the day is out with the WSJ reporting that Trump will lay out a trade vision but won’t impose new tariffs yet.
The US dollar is down 50-100 pips across the board on the headlines.
President-elect Donald Trump is planning to issue a broad memorandum Monday that directs federal agencies to study trade policies and evaluate U.S. trade relationships with China and America’s continental neighbors—but stops short of imposing new tariffs on his first day in office, as many trading partners feared
The report says it singles out China, Canada and Mexico but USD/CAD is down a full cent, as at least there is a stay-of-execution.
This is an interesting part of it:
A senior Trump policy adviser described the memo as an effort to lay out a vision for Trump’s trade agenda “in a measured way,” suggesting that the incoming president is, at least for now, taking a more deliberative approach.
The memo will be one of his first executive orders but it refers to the USMCA would could delay an retaliation until that’s scheduled to be re-opened in 2026.
We’re going to be dealing with tariff headline for four years. I wouldn’t expect these headlines to be denied right away but this is going to be the landscape.
Separately, a Fox reporter says Trump will sign 11 border- related executive orders including one that will deploy US troops to the border. This was already rumored/reported yesterday.
Along with the FX moves, oil is dropping on this. That’s because tariffs on Canadian and Mexica oil would have been a big headache for US importers and there was also the threat of Canada cutting off exports altogether. There has been something of a premium priced into markets because of that, which is now fading.
This article was written by Adam Button at www.forexlive.com.
