Financial markets were volatile as Donald Trump began his second U.S. presidency, starting with a softer-than-expected stance on China but signaling potential tariffs on Mexico and Canada. While his inauguration speech and initial executive orders avoided imposing new trade levies, Trump later suggested the possibility of 25% tariffs on North American imports starting February 1, which unsettled investors.
The U.S. dollar initially dipped but then surged to a five-year high against the Canadian dollar following Trump’s tariff remarks. Hong Kong shares rose, while other sectors, like battery stocks, faced declines, reflecting the market’s mixed sentiment.
Analysts noted that markets are cautiously navigating the unpredictability of Trump’s policies. Tai Hui, from J.P. Morgan Asset Management, emphasized the importance of differentiating between campaign promises and actual policies, advising investors to remain patient and deliberate in their decisions.
While Trump previously pledged steep tariffs of up to 60% on Chinese goods, his first-day actions only included directives for agencies to study trade deficits, signaling a more measured start to his presidency. However, concerns about future trade disruptions remain prominent.
