Trump’s new executive orders sent shockwaves through Washington. He pardoned over 1,500 people linked to the January 6 Capitol riot on his first day back in office. The newly sworn-in 47th president quickly rolled out major changes after taking office on January 20, 2025. He pulled the United States out of the Paris climate accords and slapped hefty tariffs on imports – 25% on Mexican and Canadian goods and 10% on Chinese products. His administration demanded federal employees return to their offices and revealed plans to close down FEMA. Trump’s bold initiative to create a U.S. sovereign wealth fund could rival global funds that now manage over $8 trillion in assets. These dramatic policy changes in the first few days point to a most important transformation in American governance under Trump’s second term.
Trump Signs Record-Breaking Executive Orders on Day One
President Trump made history by signing more executive orders on his first day than any previous president. His controversial birthright citizenship order stated that federal agencies would stop recognizing U.S. citizenship for babies born after February 19, 2025. This would apply if their mother was unlawfully present or had temporary legal status, and their father was not a U.S. citizen or green card holder.
During the first hearing of a multi-state legal challenge, U.S. District Judge John Coughenour described the order as “blatantly unconstitutional”. The judge then blocked its implementation temporarily for 14 days and set a February 6 hearing to determine its long-term status. The Department of Justice announced they would “vigorously defend” the executive order.
Trump’s trade policies created immediate ripples across global markets. His administration placed 25% tariffs on Canadian and Mexican imports, while setting a lower 10% rate for Canadian energy resources. Chinese imports received an additional 10% tariff. These measures affected about 44% of all U.S. imports, valued at roughly $1.35 trillion.
The economic effects appeared quickly. Asian stock markets dropped by up to 2%, and European markets showed similar declines. The U.S. dollar grew stronger against major currencies – rising 2.3% against the Mexican peso and over 1% against both the Canadian dollar and euro. Oil prices jumped more than 2% as supply disruption concerns grew. Deutsche Bank estimated these tariffs could push U.S. inflation up by 1%.
Federal Agencies Face Dramatic Restructuring
President Trump’s return to office brought dramatic changes to federal agencies. The U.S. Agency for International Development (USAID) staff found themselves locked out of their Washington DC headquarters. This agency distributed USD 72.00 billion in global aid during fiscal year 2023 and contributed 42% of all humanitarian aid tracked by the United Nations in 2024.
The administration eliminated all Diversity, Equity, and Inclusion (DEI) programs from federal agencies. The Office of Personnel Management gave agencies several directives. They had to put all DEI office staff on paid leave by 5 p.m. Wednesday. The agencies needed to take down DEI-focused webpages and stop related training. They also had to submit lists of DEI offices and workers as of Election Day and create layoff plans for affected employees.
The Department of Education responded by taking down hundreds of guidance documents and placing DEI initiative leaders on paid administrative leave. They also canceled their ongoing DEI training contracts worth over USD 2.60 million.
The return-to-office mandate affected millions of federal employees. While 54% of the federal workforce already works entirely onsite, the mandate targets the remaining 46% of telework-eligible employees. Agencies must implement this directive within 30 days. The Office of Personnel Management allows exceptions for employees with disabilities, qualifying medical conditions, or those who live more than 50 miles from agency offices.
The Schedule F executive order made a comeback under President Trump. This order aims to remove civil service protections from federal employees in policy-influencing roles. The National Treasury Employees Union, which represents 150,000 employees in 37 federal agencies, challenged this order with a lawsuit.
Markets React to Trump’s Economic Agenda
Wall Street reacted with volatility to President Trump’s economic agenda, which included a sovereign wealth fund announcement and new trade policies. The administration ordered Treasury and Commerce Departments to create a sovereign wealth fund plan within 90 days. This fund would make use of the federal government’s $5.70 trillion in direct assets.
The market response was immediate. Investors drove up prices for banks, fossil-fuel producers, and companies that could benefit from Trump’s proposed tax policies. Bank stocks increased in value as analysts anticipated lighter financial regulation and new dealmaking opportunities. The pending merger between Capital One Financial and Discover Financial showed stronger prospects for federal approval.
Trump’s trade policies triggered international responses. Canada struck back with 25% retaliatory tariffs on American imports valued at $155 billion, targeting alcohol and fruit. Mexico prepared countermeasures after Trump placed 25% tariffs on their goods. China challenged their 10% tariff through legal action at the World Trade Organization.
The economic impact proved significant. Asian markets fell while cryptocurrencies and US stock futures dropped in early trading. Deutsche Bank warned clients about possible “manic Monday” market conditions. The S&P 500 initially fell 1.9% but recovered to close down 0.6%. JPMorgan warned these policies could move toward an “unintentionally nowhere near business-friendly stance”.
Goldman Sachs predicted higher consumer prices under continued tariffs. Capital Economics warned the measures could spark a “very destructive global trade war” that might push Mexico and Canada into recession. American households could lose $1,170 in annual income from these new taxes, according to Yale Budget Lab estimates.
International Allies Question US Commitments
Trump’s dramatic policy changes sparked immediate concern among global allies. The administration pulled out of the UN Human Rights Council and cited “chronic bias against Israel”. This was the second time they left, as a similar exit happened during Trump’s first term. The council has 47 UN member states that review human rights records, and the U.S. was set for evaluation in August.
NATO faced new challenges when Trump asked members to increase defense spending to 5% of GDP. Poland currently tops NATO spending at 4.12%, with Estonia at 3.43% and the United States at 3.38%. European officials agreed they just needed bigger defense budgets but said the 5% target wasn’t financially possible. A compromise target of around 3% might emerge at the June summit in The Hague.
Trump’s foreign policy agenda met its biggest test in the Middle East. Major changes included:
- China stepped in to restore relations between Iran and Saudi Arabia
- Regional anger grew over Israel’s military actions
- Hamas’s October 7 attacks changed power dynamics
Trump’s administration now deals with a very different Middle East. The region changed drastically as Iran’s influence weakened. Tehran’s position suffered when the Assad regime fell, which cut off vital supply lines to its Lebanese ally, Hezbollah. The year-long conflict with Israel has left both Hezbollah and Hamas nowhere near their former strength.
The choice of the core team for foreign policy points to an activist approach instead of isolation. Analysts see possible conflicts between isolationist groups supporting Trump’s “America First” vision and those who want strong American power projection. These tensions will without doubt affect how the administration handles new regional challenges.
Conclusion
President Trump’s return to office brings major changes to both domestic and international policies. His first days showed bold executive actions through mass pardons, birthright citizenship orders, and a complete federal restructuring. These decisions sent ripples through financial markets and created volatility as investors adapted to new trade policies and tariffs.
The markets reacted quickly and strongly. American families could lose $1,170 yearly from new trade taxes. Global markets dropped immediately. Federal agencies went through massive changes with DEI program cancelations and mandatory return-to-office policies that affect millions of workers.
Traditional allies expressed concern over the administration’s foreign policy decisions. NATO members resisted the push for higher defense spending. The U.S. pulled out of international agreements to pursue an “America First” approach. Trump’s most ambitious economic plan yet involves creating a U.S. sovereign wealth fund worth trillions.
American governance, economic policy, and global relationships face major changes ahead. The next few months will show if these bold moves succeed or face legal and practical challenges from opponents at home and internationally.
FAQs
Trump signed numerous executive orders, including a controversial birthright citizenship order, imposed new tariffs on imports from Mexico, Canada, and China, and ordered federal employees to return to in-person work.
Markets experienced significant volatility, with Asian and European stock markets falling, the U.S. dollar strengthening against major currencies, and oil prices surging. Bank stocks gained value due to expectations of lighter financial regulation.
Trump ordered the closure of USAID, terminated all Diversity, Equity, and Inclusion (DEI) programs across federal agencies, and revived the Schedule F executive order to potentially strip civil service protections from certain federal employees.
Many allies expressed concern, particularly regarding the U.S. withdrawal from the UN Human Rights Council and Trump’s demand for NATO members to increase defense spending to 5% of GDP. The Middle East policy shifts also created uncertainty among regional partners.
Trump announced plans to create a U.S. sovereign wealth fund, potentially leveraging $5.70 trillion in federal assets. This bold economic initiative could rival global funds that currently manage over $8 trillion in assets, marking a significant shift in U.S. economic strategy.
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