By David Lawder, Andrea Shalal and Jarrett Renshaw

WASHINGTON () -President Donald Trump did not immediately impose tariffs on Monday as previously promised but said he was thinking about imposing 25% duties on imports from Canada and Mexico on Feb. 1 over illegal immigrants and fentanyl crossing into the U.S.

As he was sworn into office, Trump stopped well short of a swift tariff action against the two U.S. neighbors, but directed federal agencies to investigate persistent U.S. trade deficits and unfair trade practices and alleged currency manipulation by other countries.

In a presidential memo, Trump directed the Commerce and Treasury departments and the U.S. Trade Representative to probe the economic and national security risks of large trade deficits “and recommend appropriate measures, such as a global supplemental tariff, or other policies, to remedy such deficits.”

Investors and foreign capitals had been bracing for a day-one tariff action that could upend longstanding trade agreements, but Trump’s trade memo essentially called for more research that could back future tariff actions.

The reprieve prompted a rally in global stocks and sent other currencies higher against the dollar. U.S. financial markets were closed on Monday but will reopen on Tuesday.

Asked by reporters at the White House whether he would impose a universal tariff on all imports into the United States, Trump said: “We may. But we’re not ready for that yet.”

Asked about the Canada and Mexico tariffs, he said he was thinking about 25% because the two countries were allegedly allowing “vast numbers of people” and fentanyl into the U.S.

Trump also said he wanted to reverse the U.S. trade deficit with the European Union, either with tariffs or more energy exports.

Tariffs were the theme throughout inauguration day, with Trump saying such measures would generate “massive amounts” of federal income as his administration works to rebuild American industry. He said they would be collected by a new agency called the External Revenue Service.

“Tariffs are going to make us rich as hell,” Trump later told supporters at Capital One (NYSE:) Arena in Washington. “It’s going to bring our country’s businesses back that left us.”

CHINA ACTIONS

Trump’s trade memo called for the USTR to assess China’s performance under the “Phase 1” trade deal he signed with Beijing in 2020 to end a nearly two-year tariff war.

The deal required China to increase purchases of U.S. exports by $200 billion over two years, but Beijing failed to meet the targets as the COVID-19 pandemic hit.

USTR will determine China’s compliance to recommend appropriate actions “up to and including the imposition of tariffs or other measures as needed,” it said.

The memo also asks USTR to recommend possible changes to China’s Most Favored Nation trading status and to investigate other Chinese economic practices that may be “unreasonable or discriminatory and that may burden or restrict U.S. commerce” — language associated with Section 301 investigations such as those used to impose tariffs on Chinese goods during Trump’s first term and continued by former president Joe Biden.

The new president also signed an executive order delaying the enforcement of a ban on popular short-video app TikTok, but said he might impose tariffs on China if Beijing did not approve a potential U.S. deal with TikTok.

During his election campaign, Trump vowed to impose steep tariffs of 10% to 20% on global imports into the U.S. and 60% on goods from China to help reduce a trade deficit that now tops $1 trillion annually.

Such duties would tear up longstanding trade agreements, including the U.S.-Mexico Canada Agreement (USMCA) upend supply chains and raise costs, according to trade experts.

The memo calls on USTR to launch public consultations to prepare for a 2026 review of USMCA, and assess its impact on American workers, farmers, ranchers, and service providers.

Some industry groups and trade lawyers in Washington had expected Trump to invoke the International Emergency Economic Powers Act, a law with sweeping powers to control imports, to impose broad tariffs.

But Trump will coordinate closely with Congress on tariff measures, a senior administration official said, downplaying differences of opinion within his fledgling cabinet on how quickly to enact Trump’s promised tariffs.

The source said that Trump’s Commerce secretary nominee, Howard Lutnick and his nominee for Treasury secretary, Scott Bessent, would push Trump’s trade agenda forward soon, but gave no specific timetable.

RELIEF RALLY

The U.S. dollar slumped broadly on the news against a basket of major trading partners’ currencies, with particularly large upswings in the euro, Canadian dollar, Mexican peso and . MSCI’s measure of global stock markets rose. U.S. financial markets are closed for the Martin Luther King Jr. Day holiday.

Canadian Finance Minister Dominic LeBlanc told reporters in Ottawa that it would be a positive step for the U.S. to study bilateral trade ties rather than impose tariffs. Industry groups also expressed relief at the reported lack of immediate duties.

“U.S. businesses would welcome a deliberative approach that identifies unfair trade practices and helps Americans succeed in the global economy,” said Jake Colvin, president of the National Foreign Trade Council, which represents a broad swath of large American companies on trade matters.

Trade analysts said they still expect Trump to press ahead with a global tariff early in his administration.