WASHINGTON: Companies are giving more consideration to opportunities outside the United States because of policy upheaval under the Trump administration, said McKinsey & Co global managing partner Bob Sternfels.
Business leaders are concerned about being “vulnerable” to tariffs and other shifts to US economic and geopolitical positions, Sternfels said on Tuesday at an event hosted by the Boston College Chief Executives Club, citing conversations with the consulting firm’s clients.
That’s leading some companies to reevaluate opportunities in South-East Asia, Europe and the Gulf region of the Middle East, he added.
“That won’t be a good thing for the US economy going forward unless we can reestablish trust,” Sternfels said.
“It’s clearly still the largest market, the most dominant market, the most important market. But I do see CEOs asking this diversification question.”
Foreign demand for US Treasuries is showing “cracks,” with global central banks and other official entities reducing their holdings since March, Bank of America Corp strategists wrote in a note on Monday.
To counteract the impact of tariffs, McKinsey is increasingly working with clients to cut costs, adopt more “frugality” when it comes to capital expenditures and plot strategies for raising prices, Sternfels said. — Bloomberg
