Global stock markets swayed on Tuesday, as investors tried to digest what US President Donald Trump will do on tariffs.
In his inaugural address Trump stopped short of announcing fresh import taxes on his first day in office, though he later said new tariffs on Mexico and Canada could come on 1 February.
Shares in the US and Europe opened slightly higher, while those in Asia saw modest gains.
Trump has promised an ambitious agenda – including trade reforms, lower taxes and cuts to government regulations – which has the potential to boost company profits.
But some economists have warned that the measures may also raise inflation, which in turn could force the Federal Reserve to increase interest rates.
The dollar, which had fallen on Monday after the inauguration, regained some ground against some other major currencies, including the pound and the euro.
Trump had previously threatened new tariffs on Canada, Mexico and China on day one of his presidency. While they did not materialise on Monday, they are still on the agenda.
“We’re thinking in terms of 25% on Mexico and Canada, because they’re allowing vast numbers of people, Canada’s a very bad abuser also, vast numbers of people to come in, and fentanyl to come in,” Trump said in the Oval Office.
In a presidential memo, he directed federal agencies to investigate why America continues to import more goods than it exports as well as probing potential unfair trade practices and alleged currency manipulation by other countries.
Trump also said new tariffs on China could depend on whether a deal is reached over TikTok’s future. If Beijing blocked such an agreement “it would be somewhat of a hostile act”, he said.
But he said the US is not yet ready to impose tariffs on all imports into the country.
During the election campaign, Trump pledged a universal tariff of 10% and said he would hit China with a 60% import tax.
He has said tariffs will make Americans richer, although critics say the costs are likely to be passed on to consumers.
The president has also said he would create an “External Revenue Service” to collect all tariffs, duties and revenues from foreign sources.
US markets opened higher on Tuesday, with the S&P 500, the Dow, and the Nasdaq all seeing rises. Markets had been closed on Monday for the Martin Luther King Jr national holiday.
In Europe, London’s FTSE 100 and Paris’s Cac 40 were up slightly in afternoon trade.
Danish offshore wind giant Orsted was a big loser, with its shares down as much as 17% in morning trade, after announcing a $1.7bn (£1.4bn) impairment charge on delays to a US project and after Trump said he would end leasing to wind farms.
