Trump's second term cabinet meeting: tariffs, Ukraine, layoffs, and oil trading were all discussed

Author: He Hao, Wall Street See

According to CCTV News, on February 26th local time, President Trump of the United States held the first cabinet meeting of his second term.

At around 11 am Eastern Time, the cabinet meeting began nearby, with US stocks generally maintaining their earlier gains of the day, with the S&P 500 up 0.8%, the Dow up 0.3%, the Nasdaq up 1.3%, and the semiconductor index up nearly 2.8%. WTI crude oil futures rose by 0.09%, to $68.99 per barrel.

US-Ukraine Mining Agreement

According to CCTV news, Trump confirmed that the Ukrainian president will visit the U.S. on the 28th to sign a rare earth-related agreement. Trump said that Ukrainian President Zelensky will visit Washington D.C. on the 28th, and the U.S. and Ukraine will sign agreements on rare earth and other aspects. Trump said, “We will get our money back.”

Regarding the upcoming signing of the U.S.-Ukraine mining agreement, Trump introduced that the United States “will cooperate with Ukraine on rare earths.” The United States hopes to reclaim the $350 billion allocated to Ukraine through the mining agreement.

According to media reports, under the agreement, the United States and Ukraine will jointly establish a fund, and Ukraine will inject 50% of the future revenue from its own resources such as oil, natural gas, and minerals into the fund. The United States will have the maximum economic benefits generated by the fund and will use part of the income for reinvestment in Ukraine.

Trump also said, “The United States will not provide security guarantees for Ukraine in the agreement to end the Russia-Ukraine conflict, but Europe will do so.” He also said that Ukraine “can forget” about joining NATO.

Trump hopes the U.S. will have more talks with Russia. Trump said Russian President Putin “must” make concessions in negotiations to end the Russia-Ukraine conflict. He also expressed hope to see if the U.S. can reach an agreement with Russia before discussing easing sanctions. Trump stated that maintaining peace is easy, but reaching an agreement for peace is difficult.

US government efficiency, deficit, layoffs

According to CCTV news, Elon Musk, head of the Ministry of Government Efficiency, although not a member of the cabinet, also attended the meeting. Musk said the overall goal of the Ministry of Government Efficiency is to help address the huge fiscal deficit. Musk said the United States simply cannot afford a $2 trillion fiscal deficit each year. If this continues, the United States will face “bankruptcy”. He plans to achieve a $1 trillion deficit reduction in the 2026 fiscal year.

Trump stated that he seeks to have the Department of Government Efficiency (DOGE) save up to $1 trillion in expenses for the U.S. federal government, aiming to reasonably balance the federal budget in the short term and looking to balance the budget next year or beyond.

Mr. Trump said he must carefully choose who the State Department will cut workers. The U.S. government will be cut and the size of the government will be reduced. U.S. Environmental Protection Agency Administrator Zeldin plans to cut 65 percent of the agency’s workforce.

It is reported that a memorandum issued 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 instructed all agencies to work with the “Government Efficiency Team leader” to submit a “restructuring plan” before March 13 to prepare for large-scale layoffs.

Trump mentioned inflation

Trump acknowledges that the decline in US inflation is partly due to high interest rates.

Trump talks about tariffs

The market is closely watching Trump’s tariff issue. At Wednesday’s cabinet meeting 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 of the tariffs will continue to be implemented. The U.S. will impose a 25% tariff on goods imported from Mexico and non-energy goods imported from Canada from April 2.

On February 1, Trump signed an executive order imposing a 25% tariff on imports from Mexico and Canada, with a 10% tariff on Canadian energy products. On the 3rd, Trump announced a 30-day delay in the implementation of tariffs on both countries and continued negotiations. According to this decision, the relevant tariff measures will take effect on March 4. Trump said on the 24th that the plan to impose tariffs on Mexico and Canada will proceed as scheduled. In addition, on the 13th, Trump signed a memorandum requiring relevant departments to determine ‘equivalent tariffs’ with each foreign trading partner.

According to Xinhua News Agency, Trump said that the United States has decided to impose a 25% tariff on the European Union and will announce it “very soon”. Trump told the media at the White House cabinet meeting that overall, the tariff rate for the European Union will be set at 25%, applicable to cars and various other goods. The European Union is “taking advantage of the United States” and “refusing to accept American cars and agricultural products” for various reasons, resulting in a trade deficit of approximately “$300 billion” between the United States and the European Union.

The U.S. political news website “Politico” previously reported that the U.S.-EU trade deficit is not as large as Trump claimed. According to EU data, the trade deficit in goods between the U.S. and the EU in 2023 was 155.8 billion euros (approximately 168.6 billion U.S. dollars), while in the trade in services, the U.S. achieved a surplus of 104 billion euros (approximately 112.6 billion U.S. dollars). Overall, the U.S. trade deficit with the EU is 51.8 billion euros (approximately 56 billion U.S. dollars).

It should be noted that Trump gave a series of contradictory answers to the issue of imposing tariffs on Canada, Mexico, and the European Union on Wednesday.

At Wednesday’s cabinet meeting, a reporter asked Trump if he planned to officially implement a 25% tariff on Canada and Mexico on March 4th. Trump said, “I won’t stop the tariffs.”

Trump announced these tariff measures earlier this month, but later reached an agreement with the leaders of the two countries to delay the implementation date by a month in exchange for stricter border control measures. This extension will expire next week.

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

US Commerce Secretary Lutnick said at the meeting that the overall tariff actions against countries will be implemented on April 2.

Some analysts have suggested that it is unclear whether Trump was referring to giving Mexico and Canada additional time, or confusing this tariff measure with another global ‘equivalent tariff’ plan being developed by the US Department of Commerce and the Office of the US Trade Representative. Trump’s statements on the tariff schedule often confuse the market, as he frequently mentions multiple plans when answering reporters’ questions.

After Trump’s statement on Wednesday, the market believed that he might postpone the imposition of tariffs on imported goods from Canada and Mexico, leading to a temporary rise in related assets in Mexico, Canada, and Europe:

The Mexican peso has risen rapidly against the US dollar in the short term, pulling from below 20.45 pesos to above 20.30 pesos and updating its daily high.

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

The euro against the dollar has almost completely regained the lost ground earlier in the day. The iShares Europe ETF listed in the US rose by 0.75%, and the iShares Eurozone ETF rose by 0.89%, holding steady near the day’s high.

Concept stocks of electric car company Lucid dropped by 10.7%, Tesla dropped by 0.9%, Honda rose by 1.5%, Ford rose by 1.6%, General Motors rose by 5.5%, and Chinese concept stocks Xiaopeng Motors rose by 15%.

However, thereafter, the relevant assets responded to the impact of tariffs, and the US stock market continued to fall, while the euro and European ETFs listed in the US rebounded and then fell back:

Most of the gains in the early trading session of the US stock market were given up, with the Nasdaq 100 reversing more than 1% of the early gains and turning lower, hitting a new daily low. Intraday, component stock Axon rose by 16.81%, Intuit rose by 11.46%, Micron Technology and Broadcom rose by over 4.4%, Nvidia rose by 3.4% ranking high, Meta rose by 2.6%, and Palantir rose by 1.87%; while Apple fell by over 2.7%, Tesla fell by over 2.8%, Kraft Heinz, Mondelez International, PepsiCo, VRSK, and KDP fell by over 3%, and AppLovin fell by 12.69%, still performing the worst.

Euro falls against the US dollar by more than 0.2%, hitting a low of 1.0484. The iShares MSCI Europe ETF listed in the US fell from a daily high of $58.86, rising 0.22% intraday, refreshing the daily low to $58.50. The iShares MSCI Eurozone ETF listed in the US rose by 0.35%, refreshing the daily low to $53.38, quickly moving away from the daily high of $53.82.

Since then, EUR/USD has fallen 0.28% to 1.0486. Agence France-Presse, citing sources from the European Commission, reported that the EU will “immediately and unswervingly” counter US tariffs.

The US President Trump ordered the termination of oil trading with Venezuela

According to CCTV News, on February 26, local time, Trump announced that he would revoke former President Biden’s “concessions” to Venezuela. Trump said he was reversing “concessions” in the “Nov. 26, 2022 oil deal agreement.”

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

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

The “Golden Immigration Card” will be launched in about two weeks.

At Wednesday’s cabinet meeting, Trump once again mentioned the ‘Gold Card’ plan, stating that the plan will be launched in about two weeks, and the revenue generated can be used to pay off the national debt.

Earlier, on February 25th local time, Trump told the media at the White House that he planned to start selling the American ‘Gold Card’ for $5 million each two weeks later, targeting wealthy immigrants. He claimed that this ‘Gold Card’ would not directly grant the buyer U.S. citizenship, so it would not need to go through the U.S. Congress, but it would grant rights similar to a ‘Green Card’ and serve as a ‘powerful path’ to obtaining U.S. citizenship.

The White House refused to allow journalists from the Associated Press and other media to report on the Trump administration’s cabinet meeting

According to CCTV News, under the new U.S. government policy on media coverage, the White House has rejected journalists from news organizations such as the Associated Press from attending the first cabinet meeting of Trump’s second presidential term. It is reported that the White House has denied entry to a photographer from the Associated Press and three journalists from Reuters, HuffPost, and the German Daily Mirror.