Chinese stocks and the yuan tentatively rose on Tuesday, with investors relieved that US President Donald Trump did not announce hefty trade tariffs at his inauguration.

Trump returned to the White House on Monday with an ambitious agenda spanning trade reform, immigration, tax cuts and deregulation. He did not target China in his inauguration speech nor did he immediately impose tariffs as previously promised, sparking a relief rally in global stocks and a drop in the dollar.

At the same time, Trump directed federal agencies to "investigate and remedy" persistent US trade deficits and unfair trade practices by other countries, and said he might impose 25 percent tariffs on imports from Canada and Mexico on February 1.

“We’re thinking in terms of 25 percent on Mexico and Canada,” Trump said late on Monday night in the Oval Office. “I think February 1.”

Canadian leaders earlier expressed relief the tariffs were not imposed on the first day of Trump taking office.

Canada is one of the most trade-dependent countries in the world, and 75 percent of Canada’s exports, which include automobiles and parts, go to the US.

Trump also signed an order on Monday directing agencies to study a host of trade issues including deficits, unfair practices and currency manipulation.

These could pave the way for further duties.

He also directed federal agencies to assess China's performance under the Phase 1 trade deal that he signed with Beijing in 2020 during his first term at the White House.

The deal had required China to increase purchases of US exports by US$200 billion over a two-year period, but Beijing failed to meet its targets when the Covid-19 pandemic struck.

Trump's start to his presidency "is better than I expected," said Charles Wang, chairman of Shenzhen Dragon Pacific Capital Management Co.

Yuan Yuwei, founder and chief investment officer of Water Wisdom Asset Management, called Trump's return "marginally positive" and expected the new president to be less stringent in his crackdown on China than predecessor Joe Biden, who "sought to strangle China to death".

The CSI300 index has dropped roughly five percent since Trump won the election on November 5 with a threat to impose steep tariffs of 60 percent on Chinese goods, but had already rebounded over the past week amid gestures of goodwill between Beijing and Washington.

Meanwhile, Trump, in his inaugural address, repeated his complaint that China was effectively "operating" the Panama Canal through its growing presence around the vital waterway, which the United States handed over at the end of 1999.

"We didn't give it to China, we gave it to Panama. And we're taking it back," Trump said after taking the oath inside the US Capitol.

Panama reacted sharply to Trump's pledge, saying the key inter-oceanic waterway would remain under its control.

"The canal is and will remain Panama's," President Jose Raul Mulino said.
(Agencies)