— Trump’s immediate priorities highlighted in new GOP document. Republican lawmakers have obtained a document outlining President Donald Trump’s immediate priorities. The plans align closely with executive orders the incoming administration intends to sign, signaling swift action on key agenda items. Link to document.
— Trump to delay China tariffs, signals shift toward negotiation. President Donald Trump is not expected to impose China-specific tariffs on his first day in office, signaling a strategic shift toward engagement with Beijing rather than reigniting a trade war. According to the Wall Street Journal, the decision reflects Trump’s desire to begin his second term in a negotiating mode, with hopes of striking a new deal with Chinese President Xi Jinping. During his first term, Trump brokered a “Phase 1” trade deal with China, but many of Beijing’s commitments to purchase U.S. goods were not fully realized. While plans are underway for a memorandum directing federal agencies to review trade policies with China, Canada, and Mexico, the approach appears more measured than the aggressive tariff rhetoric from Trump’s campaign. However, sources caution that Trump’s strategy could shift, given his history of abrupt decisions.
— Dollar tumbles as Trump eases immediate tariff concerns. The U.S. dollar suffered a sharp decline on Monday following reports that President-elect Donald Trump would not immediately impose new trade tariffs upon taking office. This development eased fears of an imminent trade conflict, triggering a broad sell-off in the dollar against major currencies.
Market reaction. The dollar index dropped by as much as 1.01%. Key currencies posted notable gains:
- Euro: Up 1.3% to $1.0401, one of its biggest single-day gains since late 2023.
- Canadian dollar: Strengthened 1.15% to C$1.4319 per USD.
- Mexican peso: Rose 1.4% against the USD.
- Chinese yuan: Up nearly 1% in offshore markets, trading at 7.274 per USD.
- Australian dollar: Increased 1.2% to $0.6263.
Reasons for dollar weakness
- Delayed tariff implementation: Trump plans to review trade policies instead of imposing immediate tariffs, according to the Wall Street Journal.
- Market expectations: Investors had anticipated aggressive tariffs, so the measured approach spurred a reassessment.
- Risk-on sentiment: The reduced likelihood of trade tensions boosted investor confidence.
Broader market impact
- European stocks rallied, with the STOXX 600 up 0.3%.
- U.S. equity futures surged, with Dow futures climbing 294 points.
- Bitcoin hit a record high of $109,071.86 before stabilizing near $106,030.
Analyst insights
- Frederik Ducrozet of Pictet Wealth Management emphasized the market’s sensitivity to tariff news, highlighting the potential for negotiations.
- Nick Rees of Monex Europe warned of possible targeted levies post-inauguration.
- Kathleen Brooks from XTB noted that the absence of immediate tariffs leaves room for further debate within Trump’s team.
Looking ahead. Although immediate tariff threats have subsided, uncertainty lingers over Trump’s future trade policies. Investors will closely monitor developments as federal agencies review key trade relationships, particularly with China, Canada, and Mexico.
— Biden issues family pardons in final minutes of presidency. Former President Joe Biden, in the closing moments of his presidency, issued pre-emptive pardons for several family members, including his brother James Biden. He cited concerns over potential “baseless and politically motivated investigations” targeting his relatives. Biden added: “That is why I am exercising my power under the Constitution to pardon James B. Biden, Sara Jones Biden, Valerie Biden Owens, John T. Owens, and Francis W. Biden. The issuance of these pardons should not be mistaken as an acknowledgment that they engaged in any wrongdoing, nor should acceptance be misconstrued as an admission of guilt for any offense.” The White House made the announcement just minutes before Donald Trump entered the Capitol rotunda for his swearing-in as the 47th president of the United States. This unprecedented move has already sparked widespread debate, further intensifying the political climate as power transitions to the new administration.
— Trump to declare national energy emergency to boost domestic production. President Donald Trump will declare a national energy emergency after his inauguration on Monday to lower energy costs, an incoming White House official announced. The emergency declaration is expected to “unlock a variety of different authorities” to enhance natural resource production, though specific measures were not disclosed. The official emphasized the importance of energy independence in the context of the U.S./China AI race, highlighting the need for domestic energy to power advanced technology. Additionally, Trump plans to sign an executive order to accelerate energy production in Alaska, citing its geostrategic significance and potential for LNG exports to the Asia-Pacific region.
— Trump to sign orders on sex definitions and ending DEI in agencies. President Donald Trump plans to issue executive orders defining sex strictly as male and female and eliminating diversity, equity, and inclusion (DEI) efforts in federal agencies. Announced by an incoming White House official, the measures target cultural issues central to Trump’s campaign. One order, titled “Defending Women from Gender Identity Extremism and Restoring Biological Reality to the Federal Government,” would mandate federal agencies to adopt biological definitions of sex in statutes and regulations. It also aims to restrict taxpayer funding for gender transition healthcare and maintain gender-segregated spaces like prisons and shelters. The second order, “Ending Radical and Wasteful Government DEI Programs and Preferences,” seeks to terminate DEI programs, which critics argue are discriminatory. Both actions align with Trump’s campaign pledges to counter transgender protections and conservative opposition to DEI initiatives.
— Michael Waltz, President Donald Trump’s national security adviser, resigned his seat in Congress. Speaker Mike Johnson (R-La.) now has a slim 218-215 margin in the House. Johnson can lose just one Republican on any vote. Rep. Elise Stefanik (R-N.Y.) is expected to resign in the coming weeks to serve as Trump’s ambassador to the United Nations.
— Vilsack criticizes EPA report on biofuels as uncertain future looms. Outgoing USDA Secretary Tom Vilsack, in one of his final actions, criticized an EPA report (link) asserting that the Renewable Fuel Standard (RFS) may have had a “modest but negative” environmental impact. In a Jan. 17 letter to House Speaker Mike Johnson (R-La.), Vilsack argued the report contained significant omissions and overreached in its analysis, failing to consider greenhouse gas effects. As Donald Trump prepares to take office, Vilsack’s pushback highlights uncertainty over the future of biofuel policies, critical to rural economies and championed during the Biden and Obama administrations. Whether Trump and the Republican-led Congress will sustain or alter policies supporting renewable fuels remains to be seen.
— Putin expresses openness to dialogue on Ukraine with Trump. Russian President Vladimir Putin expressed readiness to engage with the United States on the conflict in Ukraine, offering congratulations to President Donald Trump ahead of his inauguration. “We congratulate the U.S. president-elect on taking office,” Putin stated during a televised security council meeting. He welcomed Trump’s efforts to restore direct communication and highlighted the importance of preventing a third world war. Putin emphasized that dialogue with the new U.S. administration should aim for “a long-term peace” respecting the interests of all people in the region, rather than a temporary truce leading to further conflict. Trump recently announced plans for a meeting with Putin to discuss Ukraine, aligning with his campaign promise to swiftly end the war. The two leaders have not yet spoken directly since Trump’s election victory in November.
— Trump appoints Caroline Pham as Acting CFTC Chair. President Donald Trump has chosen junior Commodity Futures Trading Commission (CFTC) Commissioner Caroline Pham as acting chair of the agency. The five-member CFTC voted on Monday to confirm her in the role, though the decision has not been publicly announced. Pham, a proponent of regulatory clarity for digital assets and advocate for “regulatory sandboxes,” will lead the agency until a permanent chair is confirmed by the Senate.
Pham succeeds Rostin Behnam, who plans to step down as chair on Jan. 20 and leave the agency on Feb. 7. Other contenders for the permanent chairmanship include Summer Mersinger and Brian Quintenz.
The CFTC oversees the $400 trillion swaps market and is expected to play an increasing role in digital asset regulation. Pham, nominated by President Biden in 2021, previously worked at Citigroup Inc.
— Kailee Tkacz Buller will be chief of staff at USDA under Secretary nominee Brooke Rollins. She previously has been president and CEO of the National Oilseed Processors Association.
