Trump 2.0, In His Own Words

President Trump’s inaugural speech outlined his second term agenda. The theme was that the US will become “far more exceptional” than it already is. Trump pledged to reverse America’s decline, rebalance the justice system, streamline government, protect borders, pare back inflation, restore manufacturing, surge energy production, impose tariffs on trade, and make peace abroad. Trump declared two national emergencies: One on the southern border, and one on energy production.  

Trump said the US will impose tariffs to protect US manufacturing. This would include creating an External Revenue Service to collect tariffs, implying a vested interest in tariff collections. On foreign policy, the military will focus on its main objective of war, but success would be measured by ending wars and staying out of wars, implying negotiations on Ukraine and in the Middle East.  

However, he reserved his fighting words for Panama, lamenting the alleged abuse of the US treaty ceding the Panama Canal. He said the US was “taking it back,” opening the potential for military action even though the more likely consequence is simply a renegotiation of relationships in an area where US influence is already overwhelming.  

For investors, the takeaway is that the Trump administration will be proactive, not reactive; unilateral, not multilateral; and hawkish, not dovish, on global trade and immigration. Equities remain expensive given the risks ahead.