Donald Trump suspended tariffs on his first day as President of the United States and is betting that his major actions will lower energy prices and curb inflation. But it's unclear whether his legislation will be enough to move the US economy as promised.
As a candidate, Trump promised to impose tariffs of 10 to 20 percent on all imports and up to 60 percent on imports from China. He also threatened to impose a 25 percent import tax on imports from Canada and Mexico if they failed to stop illegal drug shipments to the U.S. by illegal immigrants.
The threats did not materialize on Monday, Day 1 when he took office, but that does not mean he will leave, experts warned.
Trump announced the creation of the External Revenue Service “to collect all prices, fees and costs. It will be more money from foreign countries,” he said in his opening speech.
“They chose not to take any action today that could be discussed, but the Trump administration and the Republican Party's plans for tariffs show that the threat of tariffs is still there,” said Rachel Ziemba, an economic and political risk expert. he told Al Jazeera.
While Trump is expected to sign an executive order to review trade relations – including the initiation of a review of the US-Mexico-Canada trade agreement – the lack of prices on Monday “suggests to me that some of his team (including Secretary of the Treasury appointed Scott. Besent) and advisers “Congress could have done better to focus on prices and think about strategies instead of announcing them and discussing them,” said Ziemba.
In China, Trump's team is expected to focus on the 2020 deal from Trump's last term as president when Beijing had to buy more US goods to solve the trade problem between the two countries, a promise that has not been fulfilled. .
“Looking at such purchases buys before the big money supply and shows that the US may be open to such purchases,” Ziemba said.
This not only gives Trump an opportunity to negotiate the future but is also affected by market pressure and concerns that lower interest rates will lead to higher prices, weakening the US economy and reducing long-term investment, Ziemba said.
'Drill, baby, drill'
The increase in US oil and natural gas production was another big topic on Monday as Trump said they want to declare a national energy crisis.
“America will also be a manufacturing nation, and we have something that no other manufacturing nation will have, the world's largest amount of oil and natural gas, and we're going to use it,” Trump said at the inauguration. speech at the US Capitol. “We're going to drill, kid, drill.”
Former President Joe Biden entered the White House in 2021 promising to eliminate US oil, but US oil and gas prices rose sharply as drillers chased higher prices due to Russian sanctions after their invasion of Ukraine in 2022. .
Trump also said the US would “refill our reserves, to the top” and send energy around the world. Biden sold more than 180 million barrels of oil from the US Strategic Petroleum Reserve (SPR). The sale helped to cushion gasoline prices after Russia's war in Ukraine but pushed the SPR to its lowest level in 40 years.
Trump promised in his first term to fill the SPR in an attempt to help domestic oil companies suffering from low demand during the height of the pandemic. The promise was not fulfilled.
Trump also said on Monday that the US would eliminate what he called the electric vehicle (EV) mandate, saying it would save US industries.
Although there is no work from Biden to force the purchase of electric vehicles, his policies have aimed to encourage Americans to buy EVs and the car industry to switch from gasoline-powered vehicles to electric vehicles.
“The common theme is releasing affordable and reliable American energy,” an unnamed Trump official was quoted as saying by Reuters. “Because energy permeates every aspect of our economy, it is also important to restore our national security and maintain American power around the world.”
Mr. Trump said that the US is in an intellectual arms race with China and other countries, which puts the power of these companies at the forefront.
US data center electricity demand could triple in the next three years and consume about 12 percent of the nation's electricity demand due to artificial intelligence and other technologies, the Department of Energy said.
The first Trump administration considered using emergency powers under the Federal Power Act to try to fulfill a promise to save the coal industry but never followed through.
This time, Trump could use emergency powers to ease environmental restrictions on power plants, speed up construction of new plants, authorize shipping projects or open new storage facilities.
Trump is also expected to sign another law aimed at using natural resources in Alaska. The world is one of the most controversial areas in the country when it comes to energy and the environment where Republicans have already seen opportunities for oil and gas production there while Democrats want to preserve the natural environment.