What to look out for as Trump 2.0 era starts

This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

Trump says he’ll declare national emergency
U.S. President Donald Trump said Monday that he would declare a national energy emergency — part of a sweeping agenda that aims to increase fossil fuel production — end what he called the “Green New Deal,” and withdraw the U.S. from international commitments to fight climate change.

Optimistic about Trump’s term
Trump’s return to the White House has caused consternation among some countries because of his threat of tariffs and unpredictable foreign policies. But people in many other countries are optimistic about Trump 2.0, the European Council on Foreign Relations think tank said, as it published a global poll on Wednesday.

$MELANIA and $TRUMP
First lady Melania Trump launched her own meme coin, named “Melania,” on Sunday evening. The token is currently trading at $4.20, down from a high of around $13. On Friday, Trump also announced a meme coin called “Official Trump.” At the peak of the tokens’ prices, the Trump family’s net worth surged by billions of dollars, based on holdings of its just-launched digital assets.

Biden’s pardons
Former U.S. President Joe Biden on Monday issued preemptive pardons for several family members, citing concerns that they would be targeted by “baseless and politically motivated investigations.” Biden also issued pardons for Anthony Fauci, Gen. Mark Milley, members of Congress who investigated the Jan. 6 Capitol riot and others who he said were under threat of being “baselessly” targeted for political purposes.

Euro and sterling strengthen against dollar
U.S. markets were closed Monday for Martin Luther King Jr. Day. The pan-European Stoxx 600 index inched up 0.05%. The euro and British pound strengthened against the U.S. dollar, as it was reported that Trump would not impose tariffs on U.S. trading partners on his first day in office.

[PRO] Second time an echo of the first?
Trump’s second term might have the same effects on certain asset classes as it did the first-time round, according to some on Wall Street. To find out, CNBC Pro looked at the performance of several assets during the first 100 days of Trump’s last presidency and asked analysts how those assets will fare.

Donald Trump is officially the 47th president of the U.S. — and plans to hit the ground running. Trump has promised to sign more than 50 executive orders fresh off his inauguration, according to a person in his transition operation. Here are the two main issues investors will keep an eye on.

Tariffs

“To me, the most beautiful word in the dictionary is ‘tariff,'” Trump told the Chicago Economic Club in October. On the campaign trail, Trump vowed to levy a universal 20% tariff on all imports to the U.S., 25% on goods from Canada and Mexico and more than 60% on Chinese products.

Tariffs are imposed by governments to ostensibly protect domestic industries. Companies that import goods pay what is essentially a tax, driving up costs. This nudges them to look for local suppliers instead.

With supply chains being so integrated globally, and much of the manufacturing being done outside the U.S., companies may find it hard to shift production to local shores. The higher costs, then, will likely be passed on to the consumer in the form of increased prices.

In other words, tariffs could lead to more inflation.

Deportations

At a pre-inauguration event titled “Make America Great Again Victory Rally,” Trump pledged to his supporters that “the invasion of our country will have come to a halt.” Like tariffs, tighter immigration policies — or outright deportations — are typically enacted to protect the domestic economy (among other reasons).

The theory is that, with fewer people competing for each open job, it’ll be easier to gain employment.

But many parts of the U.S. economy, such as construction and agriculture, are staffed by undocumented immigrants, who take on jobs undesirable to residents. Even documented immigrants are crucial to higher-skilled sectors such as tech — as proven by Elon Musk’s tussle with Trump supporters over H-1B visas.

If reliable sources of labor vanish overnight, companies will have to raise wages to attract talent, which might reintroduce the prospect of the dreaded wage-price spiral.

Other policies

Trump has promised many other economic measures, such as corporate tax cuts, legitimizing cryptocurrency and pulling back on green energy subsidies.

Tariffs, however, might have the biggest impact on the economy and financial institutions globally.

— CNBC’s Sam Meredith, Ryan Ermey, Annie Nova, Rebecca Picciotto, Evelyn Cheng and Lim Hui Jie contributed to this report.