President Donald Trump’s unilateralist approach is not only driving global funds away from the U.S. but also causing a significant exodus of highly skilled professionals.
Bloomberg News reported on Wednesday that international funds are substantially reducing their U.S. exposure due to Trump’s tariff barrages and his pressure on the Federal Reserve (the Fed).
Mercer LLC, a consulting firm overseeing 17 trillion USD in assets, revealed that since Trump took office, 3,900 of their clients have decreased their U.S. allocations while increasing investments in Europe and Asia, particularly Japan.
c, the New York-based global investment chief at the firm, stated that global investors are retreating from the U.S. due to inflation concerns stemming from tariffs and Trump’s pressure on the Fed.
When Trump dubbed April 2 as Liberation Day and unleashed a barrage of tariffs, U.S. markets initially plummeted.
Although they later rebounded, U.S. stocks have underperformed compared to other global markets.
Despite the U.S. stock market consistently hitting record highs, the S&P 500 index has only gained 12% year-to-date. In contrast, Germany’s DAX surged 31%, while South Korea’s KOSPI skyrocketed 44%.
Kaveh pointed out that Trump’s frequent attacks on Federal Reserve Chairman Jerome Powell for allegedly slow interest rate cuts are eroding confidence in U.S. capital markets, further accelerating the exodus of funds.
He advised that investors should look to European and Japanese stocks, which still offer attractive valuations, as well as artificial intelligence (AI)-related stocks, instead of the U.S. market.
Moreover, the Financial Times recently reported that high-skilled professionals are also hastening their departure from the U.S. in light of Trump’s potential re-election.
The growing political and social uncertainty in the U.S. has sparked a trend of professionals seeking opportunities abroad.
Sam Parkas, a 33-year-old former government analyst in Washington, relocated to London in July for a tech job after government downsizing dimmed his career prospects.
He explained that he loved his job, but he felt it was time to explore other opportunities, and had to leave the U.S. to regain control over his life.
The UKHome Office reported that U.S. citizen applications for British citizenship reached 2,194 in the second quarter of this year, a 50% increase from the previous year and the highest since record-keeping began.
Applications for Irish passports also peaked at 4,327 in February, the highest in a decade.
The Financial Times noted that this trend has intensified following recent raids by U.S. immigration authorities on a Korean company in Georgia.
A U.S. immigration consultancy, Expatcy, observed that those leaving the U.S. now are not failures but successful individuals, highlighting a significant brain drain occurring in the country.
Evidently, Trump’s policies are causing both funds and skilled professionals to turn their backs on the U.S.