Donald Trump has never been on better terms with corporate America. Yet his ostensible trade agenda has never been more antithetical to the interests of big business.

In recent weeks, tech billionaires who’d once projected ambivalence (if not hostility) toward Trump — including Jeff Bezos, Mark Zuckerberg, and Bill Gates — have paid him their respects at Mar-a-Lago. The world’s wealthiest entrepreneur, Elon Musk, has become the new president’s righthand man. And Trump’s pick for treasury secretary, hedge fund manager Scott Bessent, won wide applause within the financial industry.

Even as Trump has cozied up to Big Tech and Wall Street, however, he has pledged to enact trade policies that would undermine both, along with myriad other US industries.

On the campaign trail, Trump pledged to put a tariff of between 10 percent and 20 percent on all imports to the United States, along with a 60 percent tariff on Chinese goods and a 25 percent import surcharge on Canadian and Mexican wares — at least, until our neighbors choke off the flow of all migrants and drugs across America’s northern and southern borders.

This protectionist agenda is far more radical than anything Trump attempted during his first term. It threatens to hamper American tech companies by increasing the cost of semiconductors, depress stock valuations by reducing economic growth and fueling a global trade war, and disrupt the US auto industry, whose supply chains were built around the presumption of duty-free trade with Mexico.

Thus, American investors, executives, and entrepreneurs watched Trump’s first day in office with bated breath: Would his inaugural address and initial executive orders prioritize corporate America’s financial interest in relatively free global exchange — or his own ideological fixation on trade deficits?

Trump’s Day 1 actions did not fully clarify his priorities on this front. In his inaugural speech, the president reiterated his broad commitment to protectionism. Meanwhile, his administration prepared to launch federal investigations into America’s trade deficit in general, as well as the trade practices of China, Mexico, and Canada in particular.

Nevertheless, Trump did not actually establish any new tariffs on his first day in office, as his administration’s arch-protectionists had hoped that he would.

Investors interpreted Trump’s caution as a sign that he would be heeding his advisers’ push for a more limited and incremental tariff policy; stocks rose Monday while the US dollar fell (stiff tariffs would increase the value of America’s currency).

Wall Street’s relief may be premature. Trump appears as ideologically perturbed by America’s trade deficit as ever. And Monday night, Trump said that his administration was thinking of enacting 25 percent tariffs on Canada and Mexico on “I think February 1.” Still, given that his remarks about imminent tariffs were made off the cuff, in response to a reporter’s question, and that Trump has a history of falsely predicting that he will fulfill various campaign promises in roughly two weeks, it is unclear whether he was referencing an actual plan the administration had in the works.

How he intends to balance his protectionist instincts against his desire for a booming stock market and fawning billionaire class remains uncertain. Trump’s impending trade memorandum does not end his administration’s internecine conflict over trade policy, but merely prolongs it.

Why Wall Street took comfort in Trump’s Day 1 trade actions

In recent weeks, arch-nationalists in Trump’s orbit — including his longtime immigration adviser Stephen Miller — had pushed for Trump to immediately declare a national emergency on trade, according to the Wall Street Journal.

This would theoretically give Trump broad authority to rapidly enact steep tariffs.

(Though some of the legal mechanisms that authorize tariffs require either an investigation or comment period, the International Emergency Economic Powers Act of 1977 would arguably provide Trump with a legal basis for dispensing with such procedural niceties, once he declared said emergency.)

But on Day 1, the president declined to take that approach.

Trump did foreground his commitment to protectionism in his inaugural address, vowing to “immediately begin the overhaul of our trade system to protect American workers and families.” He promised to “tariff and tax foreign countries to enrich our citizens” and establish an External Revenue Service to collect these taxes from foreign entities (Trump’s case for establishing a new agency to perform a function already fulfilled by US Customs and Border Protection is unclear). The president even dedicated multiple paragraphs of his speech to lionizing President William McKinley, a champion of extremely high tariffs.

Nevertheless, it isn’t hard to see why investors responded favorably to Trump’s actions. The president initially kept his protectionist promises abstract. While his pledges on other policy fronts were more concrete — for example, he vowed to revoke Joe Biden’s emission restrictions on new vehicles and designate international drug cartels as foreign terrorist organizations — he did not formally reiterate his commitment to a universal tariff.

Instead, Trump’s advisers told reporters Monday that he would issue a broad memorandum directing federal agencies to investigate — and propose remedies for — America’s trade deficit, as well as the purportedly abusive trade practices of China, Mexico, and Canada.

The fact that Trump declined to take a more drastic immediate step might suggest that the business wing of the Trump White House is exerting at least some influence over trade policy. Earlier this month, the Washington Post reported that Trump aides were considering a proposal to narrow Trump’s universal tariff plan, such that it would only apply to sectors deemed crucial to America’s national or economic security. Trump’s initial restraint on trade lends credence to such reports of his administration’s scaled-back ambitions.

Of course, Trump’s threat to impose 25 percent tariffs on Canada and Mexico on Monday night calls that restraint into question. And futures markets initially turned down in response to Trump’s remarks. Yet the president has long been explicit that his vow to impose enormous duties on America’s top trade partners is a gambit for securing concession on border enforcement from our nation’s neighbors. It is therefore possible to interpret his reiteration of that threat as an act of posturing.

Trump has strong incentives for moderating on trade

It’s entirely possible that Trump’s caution on trade will indeed end on February 1, if not sooner. But there are at least three reasons to think Trump will reward Wall Street’s early optimism and abandon his most radical trade policies. First, those policies would benefit virtually no major interest group within the Trump coalition. Second, Trump has historically been obsessed with the stock market’s performance on his watch. And third, he has recently displayed a willingness to subordinate hardline nationalism to Big Tech’s economic needs.

Imposing even a 10 percent tariff on all imported goods would not only harm various business interests, but would also likely increase costs for consumers. Thus, such a duty would harm both Trump’s donors and voters.

If Trump’s first term is any guide, his universal tariff would not even redound to the benefit of American manufacturers, who would be vulnerable to higher costs and retaliatory tariffs from foreign nations. Generally speaking, presidents seek to avoid enacting policies that harm the bulk of their coalition, to the benefit of a narrow band of ideologues. And this is what implementing Trump’s grandest visions for trade policy would likely entail.

Second, the imposition of a universal tariff would roil stock markets. During Trump’s first term in office, he monitored the markets’ performance obsessively, tweeting about it incessantly and suggesting that stock values were a barometer of sound policy, warning in 2018, “If Democrats take over Congress, the stock market will plummet.”

Finally, Trump has recently shown some sensitivity to the interests of his newfound friends in tech, even when those interests conflict with the tenets of rightwing nationalism. Over the holidays, Elon Musk feuded with their co-partisans over the desirability of high-skill immigration and the H-1B visa, which help American tech companies to hire foreign talent. Trump ultimately expressed support for Musk’s position.

Trump really believes in protectionism

All this said, to the extent that Trump has any deep-seated policy beliefs, the notion that free trade hurts America is one of them. Trump has been advocating for massive duties on foreign goods since at least 1988, when he called for putting a 15 percent to 20 percent tariff on imports from Japan.

Unable to seek a third term in office, Trump faces no binding political constraints. According to the New York Times, Trump feels he has a “mandate” to enact his ideological vision and “sees himself as his own best adviser.”

When the Washington Post reported that Trump’s aides were scaling back his universal tariff plans earlier this month, he abruptly declared on Truth Social, “The story in the Washington Post, quoting so-called anonymous sources, which don’t exist, incorrectly states that my tariff policy will be pared back. That is wrong.”

Trump did strike a similar tone Monday night. And his memorandum could well serve as a prelude for all his signature trade proposals, establishing a more robust legal foundation for imposing a universal tariff and punitive duties on America’s top trade partners.

In backing Trump, many in corporate America placed a bet on his prudence and loyalty. As Monday demonstrated, that is not the safest wager.