Right. Hello, everyone. We're going to get started now. Welcome to this month's webinar topic. My name is Nick. I am a director within our Onyx Group, and I'll be your host and moderating questions today. Shortly, I'll introduce our two speakers who will be fielding our questions. We have a little bit of a different kind of format than we've been offering if you've attended our webinars in the past. This event will be featuring a lot more Q&A than we've offered in the past. The majority of the session today is open to Q&A. So we will start with setting the scene, kind of some background of what's going on, a lot of recent activity in trade and trade actions. So kind of the state of trade as of right now and the policy environment surrounding that. Then we'll dive into some questions that we've pulled from your registrations. A lot of great questions and comments that came in over the last several weeks. So we kind of surveyed those, sort of a sample or compilation of all those. And then we'll shift into live Q&A. So that's the plan for the session today. So just before we dive into things, a few administrative details here. So we have about 60 minutes here for the session today. And we're just highlighting the Q&A. We always provide Q&A space, but like I said earlier, this is a primarily Q&A webinar. So I would say as early as right now, if you have questions that you want answered, go ahead and start submitting them. Just look for the Q&A function, usually at the bottom of your screen, and write those in there. And we'll start fielding those in a little bit later in the session. Okay. Also, we will be sending out a survey at the end of the event. We always do this, but also because this format is a little bit different, we really want to hear, do you like this format? Or do you like kind of the more traditional presentation, a lot more slide content? So please share your feedback as you get that survey. Okay. One last note is we're not recording this event, and we don't have materials to share because it is a more open Q&A format. So another little difference from our typical webinars. So no content, no slides or recording to share this time. Also, so coming up in a few weeks, so we usually offer a webinar every month, and this month we'll have two webinars. So this one today and then one in a few weeks. So this will be looking at sort of the surge in Chinese exports and how countries and regions around the world are responding to that. So we'll be looking at the underlying dynamics there. And so it's a focus, a very global focus, but looking at how Chinese exports have sort of driven different reactions around the world. So two options to attend, probably the February 25th option for those of you in this session here today will most likely be the most convenient session for you. So feel free to use the QR code and sign up now. Also, a couple little plugs for our online publications. Our LinkedIn account is a great way to be notified of upcoming webinars. It's also a great way to just keep up with all the material we publish. We publish short form pieces like this one here you're seeing. We also link to our long form pieces, which show up on our VantagePoint blog. Sometimes research decks, sort of deeper insights that you can download. Both of those things are on the website. And we notify you via LinkedIn when we publish those things. So great to follow us there, keep up. And then if you go to our VantagePoint blog there, you can sign up with your email. And currently what that does is it signs you up for a monthly email digest. So really just one email a month on all the activity that we publish. And it also makes sure you get invited to our webinars. So a couple of ways to keep up with our materials. All right. So, real briefly, anyone who's new to Onyx, haven't heard of us before, we'd just like to offer kind of who we are. We are a division of Expeditors. We've been around a few years now, and our purpose is to help companies navigate different policy, geopolitical, economic disruptions out there, and also take advantage of opportunities with your supply chain, so we engage with clients. We do projects on a one-off basis. We also often are set up as an advisor on an ongoing basis, so we are more of a retainer format, partnering with companies throughout the year, so that's a great way to work with us. Some different examples of the types of services we offer, you can see here on screen. We work with a lot of different functional groups with our clients, so those could be trade and compliance, customs people, also transportation and logistics. Some of the different kind of services that we find are important to those groups. You can see here whether it's monitoring regulations or monitoring geopolitical shocks, assessing your network, designing that, assessing risks. Or sometimes from a sourcing, procurement, or strategy perspective, looking at country risk analysis, entering a new country from a sourcing perspective, maybe importing to a new country, a new market that you're entering, unfamiliar to you as a company. So we offer a lot of great analysis there. Some of that's quantitative, especially on the sourcing and total acquisition cost, and a lot of qualitative analysis we offer there too. So if you have any interest, please reach out, connect with myself or any of our speakers, and we'd be happy to set up a meeting with you. All right. So on that note, I'd like to introduce our two speakers who will be answering questions today. So kicking us off, first will be Melissa Taylor, our Director of Geopolitical Research. She oversees geopolitical and policy analysts, excuse me, analysis at Onyx, providing clients with actionable insights to navigate the changing world out there. She's done work in risk advisory and analysis for multinational firms for over 15 years. And we're happy to have her here with Onyx. Also, we have today Adam Carson, our Chief Economist, has more than 20 years of experience as an economic advisor to global leaders across a range of industries. He has experience in the U.S., Europe, and Middle East. He worked at Chevron prior to joining Onyx. And he's responsible for Onyx's macroeconomic analysis and forecasting. All right. So that is all background setting the scene. Now I'd like to hand it over to Melissa, who's going to, I think, kind of prime everyone for some of the what's going on, like what's going on right now, and hopefully bring out some questions from you all. I'll hand it over to Melissa now. Yeah. Thank you, Nick. I really appreciate that. And as you're thinking about your questions, I do want to let you know that we aren't going to address extremely operational questions. We're really going to be focused on kind of macro-level work. And so if you have something that is more a question you would ask normally someone in a customs team, I do encourage you to reach out to your customs representative. So Nick, would you mind switching to the next slide here? Or I suppose the one after that. There you go. I wanted to quickly start out with just an overview, a reminder of kind of where we are in 2025. We've had a lot of disruptions, and it's across many different kind of fields and spectrums. So starting out, I wanted to take a look at macroeconomic sourcing and production. We've seen really a return to growth, but that return to growth has been really delicate, so we are seeing a lot of concern around the rising threats of tariffs because this absolutely threatens that return to growth, and at the same time, we see risks to increasing costs across sourcing and production, and we see that regardless of whether these tariffs are in place, but we see that particularly strongly in tariff scenarios. Next, we're turning to global trade. Obviously, the possibility of a looming trade war shows a lot. There's a significant amount of risk within the global trade system. We do see a rising level of trade action from across the board. It's not just Trump. We do increasingly see actions from other major economies and increasingly retaliation concerns driving actions out of economies such as the EU, out of China. We do expect that to continue. Again, it points to increasing costs for the clients that we serve. Finally, stepping back a bit on the global geopolitical landscape, we do see a new disruptive normal. We have spent a long period in this relatively calm geopolitical space. The longer-term trend that we've been moving towards for some time now is disruption. We do see that continuing for some time. Again, driving a very difficult risk environment for supply chains and for, again, our clients that we serve. With that, if we could go to the next slide. Speaking a little bit more to some of the expansion of tariffs globally, we do see the United States obviously leading the pack here. There are a mishmash of potential policies coming out of the United States, varying goals, varying possible ultimate tariffs that may be put in place, and in addition, we see a really strong focus on the domestic as well, particularly around taxes and a focus on rolling back Biden-era policies, particularly around sustainability. We've already seen that through some of the executive orders that were released on the 20th, January 20th. Beyond that, we see many countries vying for nearshoring and trying or friendshoring, trying to take on that opportunity that arises from the U.S.-China tensions that have been ongoing now for almost a decade, longer, but at the end of the day, really seeing this change in the trade relationship over the course of the last decade. As we look to the immediate future, we continue to see Mexico and Southeast Asia vying in particular for this friendshoring and nearshoring moment. And we see a lot of pressure coming from the United States in those locations to further push out Chinese influence, whether that's investment or even Chinese trade diversion is a major concern within the Southeast Asian countries that we'll see become a prominent part of US trade policy over the course of the next year. Turning to the EU, we do see the EU prioritizing US market access over getting into a tit for tat with the United States in a tariff war. With that said, Europe also feels like it has much to defend and has prepared some important retaliation for the possibility of US tariffs. As the president recently said, he is absolutely looking to turn to the EU in the near future. China continues to be a major focus for the United States. Obviously, we saw the 10% tariffs that were put in place on Tuesday. We expect to see a continuation of this dynamic well into the future. We'll get into that a little bit here in just a short while. Finally, turning to India, we still see manufacturing as a priority. There is a significant concern about the ability of India to take on some of the investment that some countries or some companies would like to see go from China or even from Southeast Asia into India, largely due to red tape and infrastructure problems. So we do continue to expect many of these trends to continue, but we do expect quite a bit of pressure to be put on them from the U.S. policy angle and increasingly from China as well. And I think from there, actually, let's stop sharing. I want to quickly just talk to the recent trade action that we've seen. So we saw last week, or we saw, I suppose, on last Friday and Saturday, there was an executive order calling for tariffs on Mexico, Canada, and China, or three executive orders. And we saw that the Mexico executive order was suspended. And ultimately, the Canada executive order was suspended. But we did continue on with the China executive order. And there is a 10% tariff on all products coming from China as well as Hong Kong, which was a bit of a surprise coming out of the administration. We haven't seen that really before. And then very limited exemptions. Very little has been said about the possibility of exemptions moving forward. And at this point, it does appear that there's not very much interest in pursuing exemptions. We also saw a suspension of de minimis, which is very important for those of you who are interested in moving your goods via air freight. That's something that our Chief Economist, Adam, can speak to a little bit. And we also saw responses from these countries. So while we didn't see the potential retaliation coming out of Mexico, we did see a careful negotiation from Claudia Sheinbaum, essentially reaching a deal to send 10,000 troops to the U.S. border. We saw Canada initially come to the table with quite a few of its own retaliatory measures. The Trump administration basically sent Canada back and said, "We are not here to discuss a trade war. We're here to discuss the border." Canada came back with another proposal and reached a deal with the Trump administration. But at the end of the day, Trump and Xi did not speak. The tariffs on China did go into place. The suspension of de minimis did take effect. And we saw yesterday an implementation of several retaliatory measures on the United States. These were not insignificant. There were actions on coal and LNG and on crude oil. None of those amount to a huge amount of U.S. exports or have a major impact on the U.S. economy. There were actions on trucks and farm machinery. And there were several antitrust probes launched. And we also saw a critical mineral export ban for five different critical minerals. And for those particular minerals, they were very symbolic in a lot of ways. They will have impacts. They are important. And we do see a concentration of supply out of China, whether that's the raw material or the processed materials. So these do have impact, but they also provide a lot of symbolism in targeting some of the key areas that both Biden and Trump have been interested in pursuing, including minerals that are important for data center construction. So we do expect this tit for tat to continue. But in my opinion, I do believe that we saw a fairly muted response from China. And moving forward, we're going to be looking forward to hearing a little bit more about how the Trump administration is responding to that. But it did appear to be an attempt to come to the table and have a discussion. With that, I think I'll go ahead and pass this back to Nick because I want to make sure we have plenty of time for Q&A, and we can dive into your questions. Awesome. That's great background. Thanks, Melissa. So we've got Adam here now too. So again, just a reminder, submit your questions. We do have several that we pulled from registration. So we'll start with that, but certainly happy to hear from you live today. So why don't we start with we've had a pretty kind of frenzy last few days. Like you said, Melissa, the tariffs on U.S. imports from Canada and Mexico originating goods there. Maybe we'll just start there first. We got the 30-day pause on that. Do we think we're just back where we are in 30 days? I mean, I know early days still, but any signs that this is going to be any different 30 days from now? I would say I don't think we are going to be back here in 30 days. I don't think that this is going away. I don't think that we saw some really interesting but quite minimal responses from Mexico and Canada that resulted in this 30-day pause. I do expect more to be demanded of them. That said, that doesn't mean that the bar is going to be all that high. Only Trump really knows, but the constraints all point towards continuing to reach agreements and continuing to keep this can down the road as much as possible because of the economic impacts that Adam can speak to a little bit more, but at the end of the day, we have the USMCA renegotiation on the table currently in mid-2026, but Trump has called for it to happen sooner. So as long as that is still on the table and he really wants some, in particular, concessions on automotive, we do expect this maybe not exactly this standoff, but we expect that continued tension and the continued risk of tariffs to hang over everyone's head. Okay. You mentioned the economic impact. Yeah. Go ahead, Adam. Yeah. I thought there were some interesting kind of developments with the China and Mexico or sorry, the Canada and Mexico tariffs that I agree with Melissa. This isn't going away, but I think it's hard to read what is the bar going forward. The bar for this 30-day delay, feel free to disagree as well, Melissa, but it was a very low bar, right? We're talking about things that the Canadian government was going to do anyways. Something they announced, my understanding is over a month ago that they were going to do. And Mexico sending National Guard troops to the border isn't really that onerous of a thing as well. I think there are a couple on the economic side, kind of key points to the Canada and Mexico side of this equation in terms of the U.S. putting tariffs on those two countries. I've heard other folks say this. There's no such thing as sort of like a U.S. manufacturing sector. It's more of a North American manufacturing sector, especially when you think about autos. Parts are going across the border multiple times before you have the final product, and so it's quite destructive and quite disruptive to have such high tariffs between the U.S., Canada, and Mexico, and I think the business community in particular came out pretty strongly against tariffs on Canada and Mexico. It was kind of like, "Wait, why are we doing this? They're our allies. This is not the way we understand, we have an issue at the border with security, etc., but this is not the right way to go about trying to fix that problem." And I tend to agree with the business community in this particular area because, as I mentioned, the disruption to the supply chains, the effects on growth, inflation would be a very high price to pay for what Canada and Mexican governments are likely to want to help the U.S. with anyway. So I think that's a key difference between Canada and Mexico and then the discussion on China and how that's going to play out. So I think sort of the push and pull between these different regions is very different this time around. I think it's worth noting that there are consequences to this size of tariff and this scale of kind of threat to put tariffs on Canada and Mexico. One of them being, we're now seeing their reports. It's still early, but there are quite a few reports of companies trying to very quickly rush their inventory forward and trying to prepare for this level of tariffs. There were a good number of people who understandably believe that it was purely a negotiating tactic and not a real possibility that tariffs could be brought, and I do think that we're seeing companies now rapidly responding. Then if we do continue to see this moving forward, the question is, does that just mean, for example, are companies going to continue to carry just massive amounts of inventory and have their supply chains overburdened in that way moving forward until, I guess, for the next four years or until USMCA has agreed to? Yeah. Okay. Interesting. So I know we have probably a lot of audience located in Asia, Asia-Pacific region for this session. So I think it'd be good for us to talk about China a little bit here, kind of where we stand. And so as you explained, Melissa, the 10% tariff on China origin goods. I'm seeing some questions in the chat about goods not origin China, but shipped through China. So the country of origin rules are originating goods, country of origin, not where it's shipped from, just to kind of clarify that. So originating goods from China have 10%. So we talked about kind of 30 days out, the North America sort of picture. I'll start with you again, Melissa, here for China. Do we have a sense of kind of the 10% and will those be removed? And then we can go to Adam and get his thoughts too on this. Yeah. So I mean, again, it's almost impossible to say. I think as a group, we tend to lean more towards these 10% tariffs are here to stay. It is conceivable that they could be pulled back. But as we like to point out, that there are constituencies that are built around these tariffs. And more importantly, I think that even if this 10% did, this was removed, if the de minimis exemption was put back in place, ultimately, again, this is a key driver of policy in the United States right now. This is a key area for Donald Trump. This is something he's been concerned about since at least the 1980s when he took out an ad, I think in the Wall Street Journal or something like that, to talk about this. So he has been a big believer in problems with trade deficits and particularly around China's trade practices. And I do believe this is something that he will continue to pursue one way or another. Now, on top of that, I think that there are real structural reasons why the United States and China are continuing to have this conflict. It's something that continued through the Biden administration for a reason. And I think there's increasingly bipartisan in the United States commitment to trying to rein in what the U.S. considers unfair trade practices. Adam, what are you going to be watching with these tariffs in place and everything? Are there things you're going to be watching, sort of numbers, trends, I don't know, supply chain shifts, things like that? What's kind of like 30 days, 60 days out? What will be on your mind there? There's a lot on my mind at the moment. This type of environment raises a million questions, right? More questions than answers. But the types of things that maybe I can walk through my logic and that might shed some light on kind of how to break down these problems. So first off, when we think about tariffs, aren't the only issue, by the way, that the U.S. economy is facing from a policy perspective. There's also a lot of uncertainty around immigration policy and fiscal policy that just further complicate this situation. First, when we think about tariffs, there are a couple of channels through which tariffs would impact the U.S. economy. First is obviously the price impacts and what kind of demand destruction that creates. There might be some offsetting effects in currency markets. We've seen a lot of volatility in currency markets over just the past couple of weeks because of announcements and delays, etc. Then we watch the level of retaliation from other countries. Is it targeted? Is it broad? That has obviously big macro impacts, but also sectoral impacts depending on how focused that retaliation is. Then we're looking at kind of variables that indicate market sentiment or level of uncertainty. I think there was some really interesting data that came out just within the past couple of weeks around U.S. consumers' inflation expectations. In the past month, inflation expectations have jumped like 0.3-0.5 percentage points depending on which survey you're kind of looking at. That just happens to kind of correlate with some of the modeling that we and others have done on sort of, let's call it sort of like a middle-of-the-road escalation of tariffs. How would that impact U.S. inflation over a 12-month period? You're in that sort of 0.3, 0.4, 0.5 percentage points kind of range, which pushes inflation above 3% and puts the Fed in a bit of a box, right? So you're going to have a hit to demand and higher inflation as well. So how does the Fed respond in that situation? Also, with expectations in that kind of vein, there's a sense of, I think there's going to be a sense of heightened policy uncertainty that could cast a pall across business investment in the U.S. There's a pretty strong inverse correlation between policy uncertainty and business investment, which makes sense. If you don't know what the policy environment is going to be over the next 12, 24 months, 48 months, whatever, it's hard to make a call on where to put your capital. And policy uncertainty is extremely high right now. So if you're a U.S. business, you got to be thinking, "Well, the only reason I would pull, the only reason I would reshore manufacturing is because of these new tariffs." If I think tariffs are going to get high, okay, well, maybe the economics work out so that I would pull more manufacturing back to the U.S. Well, what if those tariffs go away? Or even if Trump doesn't take them away, what if the next administration takes them away? You're hanging your bet on a pretty thin thread there that your risk is extremely concentrated in that case. But even if you're willing to make that bet, how are you going to get financing for that? At what risk premium are you going to get any kind of decent financing to make a multi-billion-dollar investment in manufacturing capacity in the U.S. based on tariff policy? So I'm watching kind of like market sentiment of where are risk premia going? Where is the sense of uncertainty and overall sentiment going? How is that going to impact business investment? I think so far what we've seen on the consumer and tariffs and how that will affect the consumer side is pretty muted, right? 10% tariff on Chinese imports is going to be a muted effect on demand. We've dodged a bullet so far with the 25% tariffs on Canada and Mexico. If that were to come back and you get some retaliation, I think you're starting to head down a road where an otherwise pretty solid U.S. economy is going to be growing somewhere in the 1% range or low 1% range, which is a very uncomfortable position to be in. Any shock from that point could put you into a recession. So kind of a long-winded answer for you, Nick, but that's how we start to kind of break down and kind of get a sense of where the momentum might be shifting. Yeah. Interesting. Thanks, Adam. Okay. So kind of back to the 10% tariffs, Adam, I'm curious. So as we saw, the de minimis exemption went away for goods from China, which means no easy filing option anymore, plus duties, of course, and any other previous duties that apply now apply, plus the new 10%. So it's kind of getting hit from all sides. So from an airline perspective, I know our teams talked about the surge in e-Commerce. A lot of that's de minimis and how that's tied up capacity. It's only been a few days, but have we seen anything from the airlines, how they're reacting to this? Anything you're seeing yet on that? I think it's a little too early to tell how this is going to play out. I can think of a couple of ways this could, and I would defer to our air team for sure here, but I think a couple of ways this could play out. First, just reiterating the sort of demand channel, okay? So are these new policies going to affect demand for e-Commerce goods? I think very minimally. The price impact from a 10% tariff, I think, has a small impact. I think some of that gets offset by currency shifts. It remains to be seen if Chinese manufacturers could eat some of that. Do they have any flexibility in price as well? Even just assuming a few percentage points of that 10% could help demand remain robust. But then on the de minimis side, I think there could be some mode switching that occurs if it just becomes way too cumbersome to get these kind of small packages through customs. If it takes too long at the border, it's too costly, the value proposition of air cargo versus ocean may switch. And you may see more e-Commerce shifting to ocean, pre-positioning inventory. I mean, my understanding is looking at the business models of Shein and Temu, they're kind of heading in that direction anyway. They saw this coming. Everyone kind of saw this coming for some time now. It was just a matter of when the U.S. government was kind of going to put their foot down on it. So I think some mode shifting, I think, is inevitable. Maybe this accelerates that a little bit. Yeah. Makes sense. Okay. All right. So we've got some questions about at least a couple of questions talking about South Asia or Southeast Asia, and there's a reference to the China Plus One policy in one question where people are setting up not only China as a manufacturing source, but also other countries, and often across Southeast Asia, so let me start with you, Melissa, first on this, so given that China was hit with the 10% tariffs, are these other countries, let's say Vietnam, that's come up, but also say Malaysia, Indonesia potentially too, are these countries now at risk of tariff actions for shipments going to the U.S.? Yeah. So I think there are a couple of concerns here. One of them is something we've seen before. So there's been significant action to try and rein in trade diversion. So basically, Commerce has spent a lot of time and effort trying to identify times when goods are not sufficiently transformed within country and yet still claimed as a Southeast Asian country as country of origin. Or that we've seen on a related note, we might see some kind of connection to forced labor or coming out of China and essentially some actions around adding companies in Southeast Asia to entity lists. So those are pretty targeted. Those aren't necessarily going to be broad actions. But I do expect to see a really strong focus there. And I wouldn't be surprised if the Trump administration chose to use tariffs as a threat to try and crack down on some of those issues, particularly the trade diversion issue. Similarly, we've seen some real concern about advanced technology leaking from the United States export controls to China. Recently, many of you may have seen discussion around DeepSeek, which is an AI model. Right now, there's an investigation where they believe that the GPUs needed to produce that model may have come through Singapore. I would not be surprised if the Trump administration not only clamps down more on its export controls and therefore advancing this kind of decoupling in technology, but also is seeking to really, again, prevent the movement of advanced tech to China from Southeast Asia. And then finally, I think with these larger tariffs, we have the question of, I think really the key thing here is going to still be trade deficits. When we look in the region, Vietnam is really the key focus here. Ultimately, though, with Vietnam, I would say there's not as major of an ask from the Trump administration that I see in terms of anything coming, any of the rhetoric coming out of the Trump administration. Primarily there's going to be some hope for market access, maybe for U.S. defense goods, U.S. energy. At the end of the day, whether the U.S. has anything major to ask out of Vietnam is questionable, to say the least. I do think that we may see tariff threats, but they are most likely going to be transactional, in my view. The response from Vietnam is likely to be pretty calm and measured. Yeah. Makes sense. Adam, I'm curious your thoughts on this too. I mean, a lot of people have gone to Vietnam or other countries, Thailand, etc., from a cost perspective. And have you any thoughts of kind of the impact of tariffs? When does it become material where those cost advantages start to get erased? Or feel free to kind of take that question in a different direction if you'd like to. Yeah. Tariffs will be material, right? I think Vietnam in particular is kind of on the edge here. How are the microeconomics going to play out in Vietnam? I think there's evidence already that from a logistics perspective, Vietnam is not very cost competitive at the moment. They've got to make some pretty serious investments in infrastructure to not only catch up with the investment in manufacturing, but try to get ahead of it and bring that cost curve down. So Vietnam is facing a number of cost pressures there. So I think a tariff in place on Vietnam for any extended period of time would be pretty damaging. And I think, I mean, you're starting to see some companies already kind of question the value proposition of Vietnam and, "Oh, did we make the right decision? Because maybe we made the decision when it was right at the time." But now so many companies are piling in there. It's getting pretty frothy, right? And other companies are looking at it and saying, "Well, we're maxed out on Vietnam. We're not going to go there. We're going to look for alternatives." So that one in particular, I think, is pretty sensitive. Yeah. It's interesting. You're right. The kind of maxed out in Vietnam, and is there now a Vietnam Plus One strategy? I haven't heard that, but maybe we're headed there. Okay. I think we should shift a little and talk about Europe. I have some questions about Europe, I think, in the live chat as well as the registration. So, Adam, I'd like to start with you on this. It's been a unique situation with Europe economically. If you think back coming out of COVID, they haven't had as much growth as, say, the U.S. and certain countries. I know you've talked about have struggled in particular. I think some have had recessions, I believe, but so in terms of this dynamic with trade actions and particularly China, Europe has shown signs in terms of a willingness to target certain sectors like EVs. I think we've written about that as a team. Thoughts on sort of EU's position in terms of China and targeting China, but also with this backdrop of, as Melissa talked earlier, Trump has been clear that he's sort of coming after Europe next or soon at some point. So Europe's sort of in the middle here. Kind of what do you think about that in terms of their position economically, kind of where they're at and acting as a multi-country union for EU, at least, and kind of in the middle with the U.S.? EU's in a tough spot. Their economy's not doing well. In particular, Germany has had a manufacturing recession for quite some time now. So they're not negotiating from a real position of strength. I think the question I have around EU is, and maybe Melissa, we can kind of debate this live here, what does the Trump administration really want out of the EU? Is it more support for NATO? It feels like EU countries are kind of willing to do that if the pressure's really kind of put down on them. At the same time, I think I read today we're going to get some type of proposal out of the Trump administration around Russia, Ukraine in the next week or two. So I think that's kind of an added element of how Europe wants to kind of approach the US in negotiating or not negotiating around tariffs. And the EU is reliant on China for a number of products that are kind of central to some of their key policy aims, in particular around ESG and climate. So the whole kind of sort of ecosystem around decarbonization technologies, wind, solar, solar in particular, and then EVs. Can they play that game of pushing China out and still kind of achieve some of the objectives they want on the decarbonization front? It doesn't seem likely. If we're going to go down that road of also decoupling on decarbonization supply chains, that's going to take several decades to kind of rebuild that. So I'm not sure I have a super specific answer for you, Nick, on this, but that's kind of just kind of how I think about it generally. I think the European economy is lucky to grow at 1% this year. And they're kind of facing a lot of structural weaknesses. So I think they're kind of in a tough spot economically and geopolitically. But Melissa, I'm curious what you think about that as well. Yeah. I mean, so in terms of what Trump really wants out of Europe, I mean, only Trump knows. And I think sometimes he only knows when he sees it. But the consistent demands have been around increased defense spending, as you pointed to. The demand at this point has actually increased from, I believe it was 2% last time around with the Trump administration. Many of the European countries have actually met that goal. And now the bar's being raised to 5% of GDP, which would be a very, very significant increase in defense spending. And I think, as you point out, there's significant economic barriers to Europe being able to kind of take on this challenge. At the same time, yeah, so Europe's in a really difficult spot policy-wise for those very same reasons. The capacity to really put either partner aside, whether it's China or the United States, isn't really there in terms of whereas manufacturing capacity or as you pointed to clean energy. And I think at the end of the day or defense, if we want to talk about the United States defense commitments. But at the end of the day, Europe is increasingly looking around and seeing that it is in need of more self-sufficiency. And that's one of the ways in which we're seeing rising trade barriers regardless of what happens right this moment with Trump. So we do see Europe essentially in this almost impossible position trying to balance those things. I think the Biden administration was really successful in bringing Europe in. At other times, the Biden administration pushed Europe away significantly by doing things like investing in the CHIPS Act, which was a subsidy in the United States that did not include their partner, Europe. And so even in the Biden administration, which was really focused on outreach, we saw that contradiction in the U.S. position. And under Trump, I think there's no question that Trump's going to look more towards what's best for the United States over necessarily historical partnerships. Yeah. Okay. Thanks for that. That's super interesting. Yeah. It's like kind of making some tough choices there in Europe for sure with tough economic conditions. All right. Got a question or two around sort of the transportation perspective here. Obviously, we're part of Expeditors, so we're familiar with that. I'm sure we have some Expeditors' people on this webinar today. So sort of backdrop here, there's been a lot of disruptions with the canals, Panama Canal, the droughts, and then, of course, the Red Sea sort of ongoing still. E-Commerce out of Asia for air. We've talked about that. So as we see this trade protectionism and tariffs kind of coming, pausing, maybe coming again, what kind of impacts do we see on the ocean and air industry? I'm not asking for any predictions here, but any kind of change in trade flows, trying to put ourselves in the minds of these multinational companies that are making decisions on where to source from and whether it's worth importing still to their markets with the cost of tariffs added in. Either one of you want to take that kind of sort of this transportation perspective? What do we see happening there from a supply chain potentially shift impact? I think I mean, maybe I'll start here. If we stopped right here, I wouldn't anticipate too much change. I think about the ways in which protectionism could affect kind of trade volumes and trade routes. I think kind of what we were talking about earlier, the demand impact from a 10% tariff on one bilateral relationship, I think, is likely to be in the noise. You wouldn't see that. Again, the de minimis rule, I think, has the potential to create some mode shifting. Could create so marginally less demand for air, marginally more demand for ocean on the Trans-Pacific routes. You could see more demand. Perhaps you're going to see more building of warehousing and more demand for warehousing space in North America. Maybe that's a positive for trucking, sort of all else equal based on where we are today. I think we're still far from the level of tariffs and the level of protectionism that would drive an acceleration in de-risking behavior. It's like that's already happening, right? So that's been happening for years now. That will continue. But are we seeing enough now to accelerate that? I'm not sure we've crossed any kind of threshold that we would see a ramp-up. But let me caveat that by saying I think the indicators are pushing in that direction of I don't think we're stopping at 10% on China. That's likely to, I think, go more likely to go up and down. And protectionism in general is more likely to go up and down over the next four years. So that's the kind of thing to kind of look forward to is where is that threshold and where are we going to start to see some indications that we're approaching or across that threshold of companies accelerating de-risking behavior? And then that, I think, could set some dominoes off. And maybe you can speak to this with more data than I can, Adam, but I mean, my impression is that those companies that could easily transition and de-risk did, right? Those low capital cost movements were made. And that a lot of what is not de-risked is going to be. It's just going to be much harder to move at the end of the day. So those are longer-term shifts. Those are not necessarily things that we're going to see over the course of this year. However, I think, as you point out, there's this major risk with China because China is inherently quite different from the other conversations that we're having. I should let you answer that question. Do you have a similar sense, or do you see investment in terms of the low-cost investment movement already happening? Yeah. Yeah. So when we look at FDI flows, foreign direct investment flows, there was clearly a ramp-up. If you could sort of try to categorize that FDI flows as sort of what's de-risking and what isn't, it's a little subjective. But I think you could map that and say, yeah, de-risking clearly accelerated starting in the last Trump administration. And there was a lull during COVID, obviously, but then things ramped up again. The level of investment going into the traditional sort of de-risking landing spots, Vietnam and Mexico being the two top ones, that's kind of leveled off. And so I think, to your point, the low-hanging fruit on the de-risking play has probably happened. And now it's, okay, well, where to next? We talked about Vietnam overheating. Vietnam's 2% the size of China, so that was inevitable. We knew that was going to happen. Where's that capital going to go to next? It's not clear, and the thing is, companies are no longer, they're not in China because China's a low-cost manufacturer, so raising costs on China, it matters, but it's not the only reason companies are invested there. The network effects, the logistics, the quality. There are a lot of other tangible and intangible benefits to being there, so I think it even takes more than just the microeconomics to trigger what will be the next wave of de-risking. Yeah, and I think as we sit here and look out at the possibility of the more extreme tariff measures that are being discussed, I mean, I think that's an important point. Many of these goods are still going to come from China, and those costs are just going to get taken on, particularly on strategic goods, where a lot of people in the U.S., a lot of people in Congress and in the administration are pushing for as high as 100% tariffs on anything deemed strategic, which is a long, long list. All right. Super interesting. So we're getting close to the end of the hour here. I want to kind of bring us back a little full circle. So we started, Melissa kicked us off, the threat of tariffs. It's expanding. We talked about the recent Trump tariffs on China. So big picture question, Melissa, I'd like to hear from you first, and then Adam. But what does success look like for the Trump administration? This is the kind of million-dollar question. Yeah. This is super easy to answer. Thanks. So I mean, I think that there are the Trump administration and Trump himself have expressed four, five, six different goals, right? Some of those, we can simplify those a bit, but I mean, raising revenue is a key one. So Trump has continuously talked about raising revenue, in which case we do expect some kind of broad tariff, whether that's on a wide variety of specific goods, but across many different countries, or whether that's like a 10% across the board, all foreign goods is very unclear at this point. But we see revenue raising as a key goal. Clearly, negotiation on trying to seek out specific ends is a key goal. But beyond that, I think there's a lot of obfuscation on purpose in order to increase his negotiating ability in terms of what exactly he's trying to accomplish. I do think that he does believe strongly in moving manufacturing back to the United States. And he believes that tariffs can accomplish that. And we can disagree with him on that. And at the end of the day, I think that that is absolutely a key goal of his. And he will apply tariffs in order to accomplish that. But beyond that, there's also national security concerns that many in his cabinet hold, that many in his coalition hold that are important to him politically. So there are numerous different goals at the end of the day. But I think ultimately he wants a strong U.S. manufacturing base with limited unfair trade. And none of that is fully accomplishable in his term, I think, even under his telling. But I do think that he's very intent on making that happen. Yeah. Well, what do I have? Like 30 seconds for that. I'm glad you filibustered there a little bit, Melissa. I agree with you. There are like five or six stated goals, some of which are in tension with each other. Can you raise revenue and U.S. manufacturing at the same and increase U.S. manufacturing at the same time? I don't think so. If you reshore all the manufacturing, there's much less tariff revenue, right? So that's an example of I think there are other examples too where they're competing goals. The border seems to be the number one goal right now. Secure the border. So immigration, drugs flowing across the border, that seems to be number one for the moment. And it could be a good quick win, relative quick win for the administration. And I think that would be pretty popular as well to "secure the border." Now, how far he goes on deportation, I think, is a much trickier, stickier subject for another time maybe. But then you have that's, I think, fits in the national security bucket, which bleeds into China and how he's going to play there. I agree with you, Melissa. I think bringing back U.S. manufacturing is a big goal. I think he's going to be disappointed there. I don't believe there's good evidence at all to support thinking that tariffs are a way and any way an efficient way to bring back U.S. manufacturing. So the scorecard could look pretty mixed after a couple of years of this. I think it's important to point out. I know we're at time, but I think a key goal of his is to avoid some of the worst economic outcomes that are predicted by some of the most extreme measures, right? So whether we talk about the 25% tariff on Canada and Mexico or the 60% tariff on China, it does seem in both Trump administration one and it appears based on what happened this week that that type of push that could really send the economy into significant, if not recessionary, then I think, as you point out, like 1% growth and send stock markets into a tailspin. That type of effort, I think, is not on the table as far as the constraints surrounding him. I would say that that's unlikely. Yep. Agreed. Awesome. Well, great conversation. Super interesting. Thank you both. Thank you to the audience for all the questions we got today and during registration. So I know we're on time. So thanks, everyone. And then just a reminder, there's a webinar in a few weeks. Hopefully, you can attend that. Sign up for our materials on LinkedIn, VantagePoint, and stay up to date. And then last note is just look for a survey here in the next couple of hours. Love to hear your feedback. Did you like this format? Do you like the other format? Open forum. Some comments there too. Please share your thoughts with us. We always read those. So great. Thanks, guys. Thanks, Melissa. Thanks, Adam. Thanks, Nick. Appreciate it. All right. Thanks. Thanks, everyone. Take care. Bye-bye.