Neue Zürcher Zeitung (NZZ) – Donald Trump Eliminates Highest Tariffs, but the Risk of a Crash in America Remains High

By André Müller, New York

May 18, 2025, 8:22 AM

Excerpt from article:

Yet the U.S. still holds some cards. America remains a highly attractive destination for foreign direct investment, says Stephen Johnston, CEO of Canadian private equity firm Omnigence. Thanks to Trump’s policies — lower taxes, deregulation, cheap electricity, and a massive consumer market — the U.S. offers many advantages.

According to Johnston, China and Europe do not provide comparable alternatives for investors, each for different reasons. U.S. government bonds, he says, are still “the cleanest of the dirty shirts.”

“Everyone is focused on the tariff war, but the real battle is for globally scarce investment capital,” Johnston says. Most trading partners in Europe and Canada fail to see this — Trump and the Chinese do not. It’s no coincidence, he adds, that one of China’s first retaliatory measures in the trade conflict was to ban some companies from investing in the U.S.

Johnston believes the U.S. is in a race against time. As in all G7 nations, the debt burden is unsustainable in the long run. Politically, there will be no way to reduce the deficit. He expects it will eventually be inflated away. Until then, the U.S. must attract as much foreign direct investment as possible to stand a chance at boosting productivity. “The U.S. needs to reindustrialize before it loses its status as the global reserve currency.” Original article here. Translated article here.