There will be a lot of noise as the Trump Administration gets established and much is still to be determined. However, Trump is unconventional, not unpredictable. He has been outspoken and consistent in his views on trade, and we think his “America First” platform is unequivocally pro-US manufacturing, employment and domestic growth. So we are mindful of the overall policy direction—to level the playing field, in line with the administration’s view that the US is currently at a competitive disadvantage.
We are also putting significant resources into analyzing more specific policy scenarios with the goal of identifying those companies with the best prospects for growth under a variety of conditions. Among the key variables are their reliance on global supply chains (see chart), how much of their production is offshore and their broader exposure to potential increases in import costs or, on the positive side, additional credits for exports. We also consider these variables in light of potential currency fluctuations.