It started with a bang. The first day of Donald Trump’s second term lived up to the hype. Surrounded by his inner circle, the elite of US tech and Maga pretorians, the US 47th president not only turned the page on Joe Biden’s administration, he shredded it altogether, taking no prisoners along the way.  

“Our recent election is a mandate to completely and totally reverse a horrible betrayal, and all of these many betrayals that have taken place, and to give the people back their faith, their wealth, their democracy and indeed their freedom,” he said. “From this moment on, America’s decline is over.” 

In one of those twists and turns of history, freezing temperatures forced the whole ritual inside the walls of the Capitol rotunda that was vandalised by rioters during the Capitol Hill protests of four years ago. A few hours later, Mr Trump pardoned 1500 of them in one of his first executive decrees. 

The day marked a turning point in recent US history, with many facets that could have a direct repercussion on FDI in and out of the country. 

Here are my main takeaways from the day. 

“Drill baby drill” 

Mr Trump reiterated his unequivocal support for the country’s oil and gas industry. “We will be a rich nation again. And it is that liquid gold under our feet that will help to do it,” he roared as he declared a national energy emergency to streamline investment into the production, transportation and distribution of energy sources. 

As our readers also expect, the traditional energy sector will be a big beneficiary of the policies of the new Trump administration. With the president’s backing, domestic and (friendly) foreign investment will pour into the US oil and gas industry. 

EVs and Mars

If combustion engines have new presidential favours, clean technology will have to pay the price. “We will end the Green New Deal and we will revoke the electric vehicle mandate,” Mr Trump said. 

Listening from a couple of metres behind him, Elon Musk didn’t flinch: on his face, elation throughout. If inside he felt a twinge of apprehension for Tesla’s domestic sales prospects, Mr Trump’s renewed space ambitions wiped that out right away. 

“We will pursue our manifest destiny into the stars, launching American astronauts to plant the Stars and Stripes on the planet Mars,” he said. The space industry is experiencing tremendous growth, and the likes of Musk’s SpaceX, as well as Blue Origin, the rocket company owned by Jeff Bezos, also in attendance, are poised to benefit. 

From creative disruption to diligent assimilation 

The crew-neck days are over. Silicon Valley’s top tech titans all conformed to Washington’s dress code as they paid homage to the new president, wearing starched collars and ironed sleeves. 

Mr Musk and Mr Bezos were in good company. Meta’s Mark Zuckerberg, apparently a Trumpian at the last moment, was there too, as well as Apple’s and Alphabet’s CEOs, Tim Cook and Sundar Pichai respectively. Less visible but still present was Google’s co-founder, Sergey Brin. The wind has shifted in Silicon Valley. 

On paper, it remains a bastion of creativity, free thought, libertarianism and non-government interference; in practice, it finds itself playing by Mr Trump’s allegiance-for-support rules at home as foreign markets become stormy waters for US tech. It’s business common sense, but also the end of the cultivated aura of its top executives as Steve Jobs-like spiritual leaders for users and communities. 

One notable exception 

One holdout was Nvidia CEO, Jensen Huang. He didn’t swap his characteristic leather jacket for an overpriced tailored suit. A calendar clash took him elsewhere.

As Mr Trump swore on the US Constitution as the country’s 47th president, Mr Huang was spotted at a company’s Lunar New Year party in Beijing. “We have many partners here, several thousands employees, and we have a lot of projects to do,” he told local journalists on his way to the event.

With AI at the heart of the US-China battle for global supremacy, Mr Huang’s errands suggest he still has the knife by the handle. Nvidia’s AI chips may well hold the keys for the US technological, military and economic supremacy for the years to come. As such, Washington needs Mr Huang more than he needs Washington. 

Backtracking on tariffs yet?

Those that expected Mr Trump to take the world of global trade by storm by introducing blanket tariffs from day one were left disappointed. He mentioned an “overhaul of our trade system to protect American workers and families”, but his threats were no different than his campaign trail rhetoric. 

Investors took notice, with currencies from countries facing the risk of immediate tariffs gaining ground against the dollar. After the ceremony, he did suggest a 25% tariff on Canada and Mexico however, which affected the forex market immediately. 

Panama Canal delusion

He didn’t mention Greenland, nor invading Canada, but reiterated his ambition of “taking back” the Panama Canal. “China is operating the Panama Canal. And we didn’t give it to China,” he added. 

Mr Trump’s statements are a bit self-deluding on this. China doesn’t operate the Panama Canal. Certainly, Chinese state port operators have been investing heavily on both sides of the canal in recent years. They did so also because the US military and US companies left little behind when the US gave up control of the canal. 

Broadly speaking, US investors have widely disregarded Latin America over the years. In this respect, Chinese investors have simply filled an investment gap shared by many countries in the region. Today China “operates” key infrastructure from Mexico and the Caribbean all the way down to Argentina. The cat is out and Mr Trump won’t turn back the hands of time.

Happy Lunar New Year!

For the first time in history, foreign leaders attended the inauguration ceremony. Argentina’s Javier Milei attended, as well as Italy’s Giorgia Meloni. Notably, also China’s vice-president Han Zheng attended. It was a big deal, but for Chinese media. With the world’s eyes on Capitol Hill, state news agency Xinhua led with a message for the country by president Xi Jinping offering non-Communist party organisations greetings for the Lunar Year next week, as the FT reported. A relatively cryptic foreign policy message, if any!