Rob Kaplan

In the meantime, they have to make plans on how much they're going to take out of margin, how much they're going to put in prices, how much is going to come out of dollar strengthening, although we're going the other way right now. That's what businesses are doing. And they'll adjust to it, but they're working on it. On investors, investors are not just looking at tariffs.

In the meantime, they have to make plans on how much they're going to take out of margin, how much they're going to put in prices, how much is going to come out of dollar strengthening, although we're going the other way right now. That's what businesses are doing. And they'll adjust to it, but they're working on it. On investors, investors are not just looking at tariffs.

They're looking at the whole mosaic. And what I hear more and more from investors now is there's a lot more uncertainty in USMCA was an agreed trade agreement. They see some of the other things going on with higher education, other things that are a little jarring and surprising coming out of the United States.

They're looking at the whole mosaic. And what I hear more and more from investors now is there's a lot more uncertainty in USMCA was an agreed trade agreement. They see some of the other things going on with higher education, other things that are a little jarring and surprising coming out of the United States.

And what they're starting to think is maybe we started the year being over allocated the dollar in US assets. Maybe we should be rebalancing and reducing our dollar, not eliminating, but reducing our dollar exposure because there's enough unpredictability. And they're asking more questions.

And what they're starting to think is maybe we started the year being over allocated the dollar in US assets. Maybe we should be rebalancing and reducing our dollar, not eliminating, but reducing our dollar exposure because there's enough unpredictability. And they're asking more questions.

Is the institutional framework, is the predictability, which is one of the reasons I wanted to invest in the U.S., is that deteriorating? And that's causing people to change asset allocation.

Is the institutional framework, is the predictability, which is one of the reasons I wanted to invest in the U.S., is that deteriorating? And that's causing people to change asset allocation.

They are already either making plans or starting to act on plans. Here's the issue. And I'll give you a good example. Many folks, companies I talked to, had moved some manufacturing from China to Vietnam. Now we've got a very high tariff on Vietnam. So if we move to Vietnam, do we stay there and hope there'll be a trade agreement, or do we move?

They are already either making plans or starting to act on plans. Here's the issue. And I'll give you a good example. Many folks, companies I talked to, had moved some manufacturing from China to Vietnam. Now we've got a very high tariff on Vietnam. So if we move to Vietnam, do we stay there and hope there'll be a trade agreement, or do we move?

And they're trying to make risk management decisions. The one decision that many are struggling with is how much can they move to the United States. We know that's the one place where we won't have a tariff. However, costs are higher. is this going to be a globally competitive investment?

And they're trying to make risk management decisions. The one decision that many are struggling with is how much can they move to the United States. We know that's the one place where we won't have a tariff. However, costs are higher. is this going to be a globally competitive investment?

And if the only reason it's competitive is a tariff moat, what if that tariff moat goes away in four or five years? So that's one of the issues folks are wrestling with. And also, they're talking a lot about, can we use technology to lower the costs? And so you'll see a lot of this manufacturing that does get moved here, I would guess, is going to be heavy use of technology, 3D printing,

And if the only reason it's competitive is a tariff moat, what if that tariff moat goes away in four or five years? So that's one of the issues folks are wrestling with. And also, they're talking a lot about, can we use technology to lower the costs? And so you'll see a lot of this manufacturing that does get moved here, I would guess, is going to be heavy use of technology, 3D printing,

other methods to lower the cost.

other methods to lower the cost.

And so let me just put all this in context because it's easy to lose sight of this. The U.S. economy is predominantly a services economy. We manufacture in the United States, I'll pick another 13 or 14 percent of GDP. We import let's say, 10%, 11%, 12% goods. And global manufacturing as a percentage of GDP globally is declining.

And so let me just put all this in context because it's easy to lose sight of this. The U.S. economy is predominantly a services economy. We manufacture in the United States, I'll pick another 13 or 14 percent of GDP. We import let's say, 10%, 11%, 12% goods. And global manufacturing as a percentage of GDP globally is declining.

OK, so we shouldn't forget as we go through this, we run a services surplus with the world. We're primarily a services economy. You want to make sure that we don't do damage to services while we're trying to bolster goods. And so that's, again, the balance we have to weave.

OK, so we shouldn't forget as we go through this, we run a services surplus with the world. We're primarily a services economy. You want to make sure that we don't do damage to services while we're trying to bolster goods. And so that's, again, the balance we have to weave.