It has been 2 months since President Donald Trump was inaugurated, and his administration has already made waves both at home and abroad. His aggressive, America-first foreign policy, marked by sweeping tariff measures and a redefined approach to trade, has sent shockwaves through global markets. In this article, we summarize Trump’s early actions, examine his evolving foreign policy stance, and assess the potential impacts on world markets as well as the perspectives of various world leaders.
A New Era of American Trade Policy
In his first month in office, President Trump wasted no time in implementing significant changes to U.S. trade policy. Central to his agenda has been the imposition of new tariffs on key imports, including steel, aluminum, and select high-tech components. These tariffs, designed to protect domestic industries and reduce the trade deficit, are a return to a protectionist stance that contrasts sharply with previous administrations’ policies.
Trump’s policy aims to rebalance trade relationships by penalizing countries that engage in what he describes as unfair trading practices. Early reports from 2025 indicate that the U.S. has imposed a 25% tariff on imports from Mexico and Canada and signaled the potential for further measures targeting technology and renewable energy sectors. These moves have already begun to impact international supply chains and have generated uncertainty among global trading partners.
Domestic Initiatives with Far-Reaching Global Impact
Alongside his tariff policies, Trump has announced measures to boost domestic production, particularly in energy. His administration is actively promoting increased oil and gas production to achieve greater energy independence. This policy shift is intended to reduce reliance on foreign energy sources, instead, it has stirred concerns among global energy markets. Analysts suggest that such moves could lead to a realignment of energy supply chains, with ripple effects felt in commodity prices worldwide.
The focus on domestic production has extended to other sectors as well, with Trump calling for a review of existing trade agreements. He has hinted at the renegotiation of deals that he claims have disadvantaged American workers and industries. By prioritising national interests, Trump is attempting to fortify the U.S. economy against global economic uncertainties. However, many experts warn that these measures could trigger retaliatory actions from trade partners, potentially sparking a broader trade conflict.
Market Reactions: Volatility and Safe-Haven Assets
The financial markets have reacted swiftly to Trump’s new policies. Equity markets in both the U.S. and Europe have experienced heightened volatility as investors recalibrate their expectations for global trade flows and economic growth. In response to the increased geopolitical risk, safe-haven assets such as gold have surged to record highs in 2025. Data show that gold prices have risen by nearly 15% Year-to-Date (YTD), reflecting a significant shift in investor sentiment toward risk aversion.
Furthermore, currency markets have seen increased turbulence. The U.S. Dollar Index has fluctuated as market participants assess the impact of tariffs and the potential for further protectionist measures. Analysts warn that prolonged trade tensions may lead to sustained currency volatility, affecting international investments and global economic stability.
Global Leaders Weigh In
Reactions from world leaders to Trump’s assertive foreign policy moves have largely been negative. European officials, especially in Germany and France, have voiced strong concerns about the risk of a trade war. Former German Chancellor Angela Merkel condemned Trump’s plan to impose tariffs on steel and aluminum as “unlawful”. Likewise, on February 28, French President Emmanuel Macron stated that he departed Washington with little optimism that the European Union could avoid U.S. trade tariffs.
Chinese officials remain critical of Trump’s approach. In response to Trump’s recent tariffs on all Chinese goods, the China’s embassy said, “If war is what the US wants, be it a tariff war, a trade war or any other type of war, we’re ready to fight till the end.”
The US-China relationship remains one of the most contentious globally. This widely shared post on X is likely to be cited by China hawks in Trump’s cabinet as evidence that Beijing poses Washington’s greatest foreign policy and economic threat. Meanwhile, Beijing officials had hoped that relations under Trump might improve following his invitation to Xi Jinping to attend his inauguration. Trump also mentioned that he and Xi had “a great phone call” just days before he took office.
Opinions from the Tech and Energy Sectors
The technology and energy sectors have been particularly vocal in their reactions to Trump’s policies. Tech giants are concerned that the imposition of tariffs on high-tech components will not only disrupt global supply chains but also increase production costs, potentially slowing down innovation. Meanwhile, energy companies are watching closely as domestic production ramps up under Trump’s directives. While some industry leaders applaud the push for energy independence, others warn that an oversupply of domestic oil could lead to price volatility on the international stage.
Nvidia, a top global chip manufacturer, dropped 8.7%, hitting its lowest closing price since September 2024. Although semiconductors are not directly impacted by the new tariffs, Bernstein analyst Stacy Rasgon noted in a February report that the duties target data processing equipment, including servers that utilise AI chips. Increased costs for these products could lead to lower demand, indirectly affecting chip sales.
Looking to the Future: Expectations and Opportunities
As the Trump administration continues to shape its foreign policy and trade agenda, global markets are likely to experience ongoing turbulence in the short term. Investors should remain vigilant, diversify portfolios, and hedge against uncertainty. The long-term impact of these policies will depend largely on how other nations respond and whether a balance can be struck between protectionism and free trade.
For market participants, the coming months will be crucial. The U.S. is expected to roll out further measures, and geopolitical tensions may lead to a sustained period of market volatility. While these developments pose risks, they also present opportunities. Traders who are agile and well-informed may find attractive entry points in undervalued assets, particularly in sectors poised for recovery once global trade tensions ease.
Conclusion
In just two months, President Trump has set a new course for U.S. foreign policy—one that prioritises domestic production and a more protectionist stance. His early actions have triggered immediate responses in global markets, with increased volatility in equities, currencies, and commodities. Opinions among world leaders remain divided, reflecting the complex interplay between national interests and global economic stability. As we look to the future, investors should prepare for a period of adjustment and potential opportunity amid the evolving landscape of international trade and policy.
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