Donald Trump kicked off his first week as President by signing an executive order withdrawing the US from the Trans-Pacific Partnership trade deal, branding the move a “great thing for the American worker”.
The departure from one of Obama’s signature policies comes after Trump pledged in his inauguration address to “put America first”. Though the deal had yet to be ratified, removing the US from the process is seen as a symbol of Trump’s new approach to global trade.
The dollar slumped to a seven-week low against six major currencies late last night after Trump also vowed to impose a “very major border tax” on products manufactured abroad by US firms.
Trump told executives from major companies including Lockheed Martin, Whirlpool, Tesla and Johnson & Johnson: “A company that wants to fire all of its people in the US, and build some factory someplace else, and then thinks that that product is going to just flow across the border into the US – that’s not going to happen.” He added that he was prepared to slash regulations by up to 75 per cent if they agree not to move jobs outside the US.
The dollar index, which measures the greenback against a range of currencies, was down 0.8 per cent at 99.94 while the pound rose to a one-month high against the dollar. Meanwhile the S&P 500 suffered its worst day of losses so far this year, falling 0.27 per cent.
Joshua Mahony, market analyst at IG, said: “If today teaches us anything, it is that Trump shows little signs of slowing down, with the next four years promising to be hugely unpredictable for traders who deal with US securities. Given today’s 45-day low for the dollar index, it seems the Trump boost has run its course, for now.”
On Friday Theresa May will become the first foreign leader to meet the new President. As part of her talks with Trump, the PM is expected to discuss new trade ties and lend her support to the Iran nuclear deal, her spokeswoman said.
In a White House press briefing last night, Trump’s press secretary Sean Spicer said May and the new US President will have a “great conversation about potential trade with the UK”.
Spicer said Trump will move away from multilateral deals towards new bilateral arrangements, claiming the administration “wants free and fair trade around the globe”. Over the weekend May told the BBC that she intends to build on the special relationship between the US and the UK. Last night the White House spokesman said the relationship “can always be closer”.