President Donald Trump’s aggressive tariff strategy is prompting concerns regarding the appeal and safety of U.S. assets. Despite significant sell-offs and indications of a changing global landscape, some believe the U.S. will still yield the best returns, partly due to its prominence in critical technologies.
The concept of “American exceptionalism” in global economics and financial markets has been rapidly declining this year as President Trump implements an assertive tariff policy raising doubts about U.S. assets. The stock market has experienced a dramatic downturn and has only partially recovered. Furthermore, the U.S. dollar and Treasury bonds are losing their status as safe havens. There are apprehensions of a potential recession, increasing debt may burden the “exorbitant privilege” the U.S. currently enjoys, and there are existing trust issues with America globally.
In contrast, markets in China and Europe have outperformed this year after trailing behind the U.S. for years. However, some seasoned market participants still view the U.S. as the optimal place for investment, largely due to its dominance in critical innovations.
Economist and CEO of Roubini Macro Associates, Nouriel Roubini, asserts that technological advancements outweigh tariff impacts in the short to medium term. He claims that the U.S. leads in essential technologies and industries, making it irrelevant who is in presidential office. Meanwhile, China ranks closely second, and Europe is considered out of the equation. Roubini projects that technological innovations will boost U.S. potential growth by 200 basis points, raising it from 2% to 4% by 2030, whereas tariffs might reduce growth by 50 basis points, even at a sustained average rate of 15% post-negotiations.
Roubini argues that technological advancements will prevail regardless of political leadership due to the dynamic and innovative nature of the U.S. private sector. He highlights that innovation is transitioning from initially boosting growth short-term to creating enduring exponential growth, providing early adopters a sustainable advantage over latecomers. DeepSeek’s AI model, which made waves in Silicon Valley earlier this year, is seen as an evolution attributed to companies like OpenAI and their substantial investments.
Ed Yardeni has expressed that if Trump’s tariffs lead to a recession, the U.S. would endure less than global markets and economies. He advocates maintaining a focus on domestic investment over international ventures, emphasizing this stance before Trump’s temporary pause on reciprocal tariffs and subsequent tech import exemptions.
Despite potential upheavals in global trade due to tariffs, the U.S. maintains full employment, is a net energy exporter, and possesses a flexible, service-driven economy with robust productivity growth. This strength mitigates challenges arising from supply-chain adjustments and reduced immigration.
Mark Delaney, Chief Investment Officer at AustralianSuper, spoke to the Financial Times about the attractiveness of the U.S. for long-term investments. Despite acknowledging the volatility caused by Trump’s tariffs, Delaney has not decreased his fund’s exposure to U.S. assets, which constitutes more than half of AustralianSuper’s international holdings.
Delaney highlighted the positive economic performance, strong productivity and profit growth, and the presence of leading companies as factors making the U.S. an appealing investment destination. Even if tariff policies alter global trade flows, the impact on services—which dominate current economic dynamics—remains limited for now, though further trade disputes might eventually affect them as well.
This information was initially published on Fortune.com.
