Stock markets in the Asia-Pacific region experienced a notable uptick following President Donald Trump's inauguration and his pledge to implement a pro-business agenda for his second term in the White House. On his first day in office, President Trump refrained from imposing new trade tariffs, a move that has been well-received by investors. However, some economists have expressed concerns that these measures might lead to increased inflation, which could compel the Federal Reserve to hike interest rates.
President Trump announced plans to create an "External Revenue Service" tasked with collecting all tariffs, duties, and revenues from foreign sources. During his election campaign, Trump had promised to impose tariffs of 10% on all imports into the United States and a significant 60% tariff on imports from China. Additionally, products imported from Canada and Mexico would face a 25% tariff in line with his campaign pledges.
Trump has argued that these tariffs will lead to greater wealth for Americans, though critics caution that the additional costs may ultimately be transferred to consumers. Meanwhile, on Martin Luther King Jr Day, US markets remained closed, but optimism reverberated through the Asia-Pacific markets. In morning trade, Japan's Nikkei 225 index rose by approximately 0.4%, South Korea's Kospi saw a 0.6% increase, and Australia's ASX 200 climbed by around 1%.
In his inaugural address, President Trump promised a new "golden age" for America while reiterating his commitment to a pro-business approach. While his agenda has sparked enthusiasm in certain sectors, it remains to be seen how these policies will unfold and impact both domestic and international markets.