Donald Trump officially assumed office as the 47th president of the United States, ushering in what many are calling the "Trump 2.0 Era." His return to the White House has reignited debates over economic policies, including tariffs, immigration reforms, and energy production, which are poised to significantly impact global markets and the U.S. economy.
One of Trump’s first major announcements was his intention to declare a national energy emergency. This policy is part of a broader agenda aimed at revitalizing fossil fuel production, ending what Trump calls the "Green New Deal," and withdrawing the U.S. from international climate commitments. These actions signal a pivot away from the environmentally focused policies of the Biden administration, which had emphasized renewable energy investments.
On the trade front, Trump reiterated his fondness for tariffs, referring to them as “the most beautiful word in the dictionary.” He plans to impose a 20% universal tariff on all imports, with higher rates for Canada, Mexico, and China. While tariffs are intended to protect domestic industries, they may disrupt global supply chains and increase consumer prices, contributing to inflationary pressures. Companies dependent on global manufacturing could face challenges shifting production to the U.S., likely passing higher costs to consumers.
Immigration policy is another focal point of Trump's agenda. At a pre-inauguration rally, he promised to halt what he described as the "invasion" of undocumented immigrants. While tighter immigration controls aim to protect domestic jobs, they could exacerbate labor shortages in sectors like agriculture, construction, and technology. If businesses struggle to find workers, wages may rise sharply, potentially triggering a wage-price spiral.
Trump’s other proposed economic measures include corporate tax cuts, legitimizing cryptocurrencies, and scaling back green energy subsidies. However, tariffs and deportation policies are expected to have the most immediate and significant economic impact, reshaping both domestic and international markets.
For forex traders, Trump’s policies introduce opportunities and risks. Higher tariffs and tighter immigration could strengthen the U.S. dollar in the short term as safe-haven demand increases. However, inflationary pressures and labor market disruptions may create volatility in currency markets. Key pairs like USD/CAD and USD/CNY will be crucial to watch as trade relationships evolve.
