Trump's first cabinet meeting in his second term: tariffs, Ukraine, layoffs, and oil deals are all discussed

Author: He Hao, Wall Street News

According to CCTV News , on February 26 local time, US President Trump held his first cabinet meeting for his second term.

At around 11 a.m. Eastern Time, near the start of the cabinet meeting, U.S. stocks generally maintained an earlier gain in the day. The S&P 500 rose 0.8%, the Dow Jones Industrial Average rose 0.3%, the Nasdaq rose 1.3%, and the semiconductor index rose nearly 2.8%. WTI crude oil futures rose 0.09% to $68.99 per barrel.

Ukrainian Mineral Agreement

According to CCTV News , Trump confirmed that the Ukrainian president will visit the United States on the 28th to sign a rare earth-related agreement. Trump said that Ukrainian President Zelensky will visit Washington, DC, the capital of the United States on the 28th, and the United States and Ukraine will sign agreements on rare earths and other aspects. Trump said, "We will get our money back."

Regarding the upcoming U.S.-Ukraine mineral agreement, Trump introduced that the United States "will cooperate with Ukraine on rare earths." The United States hopes to recoup the $350 billion allocated to Ukraine through a mineral agreement.

According to previous media reports, according to the agreement, the United States and Ukraine will jointly establish a fund, and Ukraine will inject 50% of the future returns of its own oil, natural gas, minerals and other resources into the fund. The United States will have the economic benefits generated by the fund to the greatest extent possible and use part of its revenue to reinvest in Ukraine.

Trump also said: "The United States will not provide security for Ukraine in an agreement to end the Russian-Ukrainian conflict, but Europe will do so." He also said that Ukraine "can forget" to join NATO.

Trump hopes the United States will hold more talks with Russia. Trump said Russian President Putin "must" make concessions in negotiations to end the Russian-Ukrainian conflict. He also said he hopes to see if the United States can reach an agreement with Russia before talking about easing sanctions. Trump said it is easy to maintain peace, but it is difficult to reach an agreement (to achieve peace).

U.S. government efficiency, deficit, layoffs

According to CCTV News , Elon Musk, head of the government's efficiency department, although not a member of the cabinet, also attended the meeting. Musk said the overall goal of the Ministry of Efficiency is to help solve the huge fiscal deficit. Musk said the United States simply cannot afford the $2 trillion fiscal deficit every year. If this continues, the United States will face "bankruptcy". He plans to achieve a $1 trillion deficit cut in fiscal 2026.

Trump said he sought to save the U.S. federal government up to $1 trillion in spending, hoping to balance the federal budget reasonably in the short term and want to balance the budget next year or later.

Trump said he must carefully choose the State Department's layoff targets. The United States will cut government and reduce the size of the government. U.S. Environmental Protection Agency Director Zelding plans to cut 65% of the agency's staff.

It is reported that a memorandum released by the Office of Personnel Management and the Office of Management and Budget of the Federal Human Resources Agency shows that the Trump administration has directed agencies to work with the "head of the Government Efficiency Team" to submit a "restructuring plan" by March 13 to prepare for large-scale layoffs.

Trump mentions inflation

Trump acknowledged that the decline in U.S. inflation is partly attributed to high interest rates.

Trump talks about tariffs

The market is highly concerned about Trump's tariff issues. At the cabinet meeting on Wednesday local time, Trump talked about tariffs on Canada, Mexico and the EU.

According to CCTV News , on February 26 local time, Trump said at a cabinet meeting that most tariffs will continue to be implemented. The United States will impose a 25% tariff on goods imported from Mexico and non-energy goods imported from Canada starting April 2.

Trump signed an executive order on February 1, imposing a 25% tariff on products imported from Mexico and Canada, of which the 10% increase in taxes on Canadian energy products. On the 3rd, Trump announced that the implementation of additional tariffs on the two countries was suspended for 30 days and negotiations continued. According to this decision, the relevant tariff measures will come into effect on March 4. Trump said on the 24th that the plan to impose tariffs on Mexico and Canada will be "advanced as scheduled." In addition, Trump signed a memorandum on the 13th, requiring relevant departments to determine "reciprocal tariffs" with each foreign trading partner.

According to Xinhua News Agency, Trump said that the US has decided to impose a 25% tariff on the EU and will announce it "soon". Trump told the media during a cabinet meeting at the White House that day that overall, the tariff rate on the EU will be set at 25%, which will be applicable to cars and various other commodities. The EU "takes advantage of the United States" and "refuses to accept American cars and agricultural products" for various reasons. There is a trade deficit of about "$300 billion" between the United States and the European Union.

The American political news website Politics previously reported that the trade deficit between the United States and Europe is not as large as Trump said. According to EU data, the United States and the EU trade deficit in 2023 was 155.8 billion euros (about 168.6 billion US dollars), but in terms of service trade, the United States achieved a surplus of 104 billion euros (about 112.6 billion US dollars). Overall, the U.S. trade deficit with the EU is 51.8 billion euros (about 56 billion US dollars).

It should be noted that Trump gave a series of conflicting answers to the issue of tariffs imposed by Canada, Mexico and the EU on Wednesday:

At a cabinet meeting on Wednesday, a reporter asked Trump whether he planned to formally implement 25% tariffs on Canada and Mexico on March 4. "I won't stop the tariffs," Trump said.

Trump announced the tariffs earlier this month but then reached an agreement with leaders of the two countries to postpone the implementation date by one month in exchange for stricter border control measures. This extension will expire next week.

However, later on Wednesday, Trump also said that tariffs on Mexico and Canada will take effect on April 2.

U.S. Commerce Secretary Lutnik said at the meeting that the overall tariff action against various countries will be implemented on April 2.

Some analysts said it was unclear whether Trump was giving Mexico and Canada extra time or confusing the tariff measure with another global "peer-to-peer tariff" plan being formulated by the U.S. Department of Commerce and the Office of the U.S. Trade Representative. Trump's statement on the tariff schedule often confuses the market because he often mentions multiple plans at the same time when answering reporters' questions.

After Trump's statement on Wednesday, the market believes that he may postpone the imposition of tariffs on Canadian and Mexican imports, causing related assets to rise in Mexico, Canada and Europe:

• The Mexican peso rose rapidly against the US dollar in the short term, pulling up from below 20.45 peso to above 20.30 peso and setting a new daily high.

• The US dollar rose about 0.2% against the Canadian dollar to 1.4342.

• The euro almost completely recovered the loss of land earlier in the day. iShares ASUS European ETF listed in the United States rose 0.75%, while iShares ASUS European Eurozone ETF rose 0.89%, stabilizing around the daily high.

• Electric vehicle concept stock Lucid fell 10.7%, Tesla fell 0.9%, Honda rose 1.5%, Ford rose 1.6%, General Motors rose 5.5%, and Chinese stock Xiaopeng rose 15%.

However, since then, the relevant assets have emerged from the reaction of tariff shocks, US stocks have continued to fall, and the euro and European ETFs listed in the United States have risen and fallen:

• US stocks gave up most of the gains in the morning, while Nasdaq 100 gave up more than 1% in the morning, turning a decline, setting a new daily low. Axon rose 16.81% during the session, Intuit rose 11.46%, Micron Technology and Broadcom rose more than 4.4%, Nvidia rose 3.4%, Meta rose 2.6%, Palantir rose 1.87%; Apple fell more than 2.7%, Tesla fell more than 2.8%, Kraft Heinz, Mondez International, Pepsi, VRSK, and KDP fell more than 3%, AppLovin fell 12.69% and still performed the worst.

• The euro fell more than 0.2% against the US dollar, reaching a low of 1.0484. iShares MSCI European ETF listed in the United States fell from a daily high of US$58.86, up 0.22% in the day, setting a new daily low of US$58.50. iShares MSCI Eurozone ETF listed in the United States rose 0.35%, setting a new daily low as US$53.38, quickly breaking away from the daily high of US$53.82.

Since then, the euro fell 0.28% against the US dollar to 1.0486. AFP quoted the European Commission as saying that the EU will "immediately and unswervingly" counter US tariffs.

U.S. President Trump orders to terminate oil deals with Venezuela

According to CCTV News , on February 26 local time, Trump announced that he would cancel the "concessions" given to Venezuela by former President Biden. Trump said he is revoking the "concessions" in the "November 26, 2022 Oil Trading Agreement."

Venezuela has interrupted diplomatic relations with the United States since January 2019, while the United States has continuously expanded economic sanctions on Venezuelan crude oil, including banning the import of Venezuelan crude oil and freezing of Venezuelan oil companies' assets in the United States. On November 26, 2022, the U.S. government announced the issuance of a license to Chevron Oil Company, allowing companies to limitedly resume crude oil extraction operations in Venezuela and ship the country's crude oil to the United States.

WTI crude oil futures fell 0.54% to US$68.56 per barrel.

"Immigration Gold Card" will be launched in about two weeks

At a cabinet meeting on Wednesday, Trump once again mentioned the "gold card" plan and said the plan would be launched in about two weeks and the revenue generated could be used to repay state debts.

Earlier, on February 25 local time, Trump told the media at the White House that he planned to start selling US "gold cards" priced at $5 million each in two weeks, and the target group is wealthy immigrants. According to him, this kind of "gold card" will not directly give buyers US citizenship, so it does not need to pass the US Congress, but it will give the same rights as the "green card" and is a "powerful path to obtain US citizenship."

White House refuses AP and other media reporters to report on Trump's

cabinet meeting

According to CCTV News, according to the new U.S. government's policy on media reports, the White House rejected journalists from the Associated Press and other news organizations to enter the first cabinet meeting of Trump's second term of office. It is reported that the White House rejected an Associated Press photographer and three reporters from Reuters, the Huffington Post and the German Daily Mirror.