Morning. Good afternoon, everyone. Welcome to another webinar from Onyx. My name is Nick. I'm a Director with our Onyx Group and I'll be introducing our speakers here shortly. This month we're back pretty quickly after our July webinar and we wanted to weigh in on the status of trade following the August 1st deadline that the Trump administration had set for the negotiation of the reciprocal tariffs with many countries around the world. There was certainly a lot of activity last week. With that in mind, we'll share our perspectives of these updates and look at some of the different key regional relationships with the U.S. and kind of where those stand right now and l ooking forward. W e also wanted to mention that probably many of you attend other webinars offered by Expeditors and divisions of Expeditors like Onyx. We did want to mention there's another one coming up tomorrow. The Expeditors Customs Group is offering, I believe they offer two a month and it's a great time to hear from them. They're so great at answering all of the different, you know, procedural things you need to know to move your goods through customs, especially with all the new tariff remedies and changes that have been going on this year. I highly encourage you to check that out if you're not already signed up. We put the information here and the QR code if you want to use that to register. You can find any of the Expeditors webinar events on the expeditors.com website. All right, a few things here. About maybe 45 minutes total of content with Q& A. Use the Q& A window on your screen to submit questions in writing and we'll look for those. We'll answer those throughout if there's an opportunity. Otherwise we'll answer at the end. Also, we are recording this session as usual and always happy to provide the recording of the session as well as the slides that we'll be showing. Just look for a survey as usual in your email within a few hours after the event. By filling that out, it just takes a minute or two, you'll get a copy of the slides and a link to the recording. Okay. Other couple reminders, make sure to follow us on LinkedIn. Keep up with all of the webinar invitations, all of our commentary, several posts per week. We also post longer form analysis on our Vantage Point Blog, and we announce those blog posts on LinkedIn. Definitely encourage to follow on LinkedIn, and then you can just subscribe directly to the Vantage Point Blog. That way you'll get our monthly digest and then blogs throughout the month, usually one a week kind of at most typically. Okay. Briefly, about Onyx. As I mentioned, we are a division of Expeditors. We've been around by name, you know, two and a half years now. We're an advisory firm that offers our help to clients with global footprints and supply chains and sourcing from different countries and moving goods to different destinations. Essentially what we do is we offer our help in navigating disruptions, risks, pursuing new markets, and changes to your network. We engage with our clients on an ongoing basis in a retainer format throughout the year and also are happy to do individual scoped out projects where you have a very specific need for the short term. That's a bit about us in Onyx. We have many service lines that cater to different personas and departments, whether it's Trade and Compliance, Strategic Sourcing and Procurement, Transportation, Logistics and Distribution, or also just higher level strategy, enterprise risk type areas. Just a sampling of our services here, some of our core ones. If you're interested, please reach out to us and happy to always have a meeting with you and introduce in more detail. We have a couple speakers here today. First up, Melissa Taylor, Director of Geopolitical Research. She oversees the delivery of geopolitical and policy analysis at Onyx, providing clients with actionable insights in a changing world. Also Adam Karson, Chief Economist. Adam has more than 20 years of experience as an economic advisor to global leaders across a range of industries and has extensive experience in the U.S., Europe, and Middle East. With that, I'm going to turn it over to Melissa to get us going. All right, thank you, Nick. Really appreciate the introduction, and basically I wanted to give you a sense for what we're going to do today. Obviously, we had this massive shift in U.S. policy occurring over the last six months. We've been looking for signs of what's to come for a long time and feel that a lot of the uncertainty has been resolved. We'll dive into that a little bit. We'll dive into what the macroeconomic picture looks like. We are not going to be able at this time to give you an in-depth look at customs and some of the ways that you need to adjust to meet the demands of these various changes. However, as Nick pointed out, we do have an awesome customs team. I'd really encourage you to go ahead and attend their webinar tomorrow for those types of questions. Just to kick off, we have seen pretty significant changes really in the last few weeks. Last Thursday evening, nine different tariff levels were announced for countries around the world. We saw that those rates are going to be in addition to the current rates that are applicable on these countries, which essentially dramatically increases the overall effective tariff rate. We also saw that there is a real focus in the executive order on transshipment. This adds an additional 40% rate to any goods that the U.S. government deems as attempting to avoid these tariffs. We do see a pretty significant focus on this transshipment idea. We'll discuss a little bit around some of the open questions there. Ultimately, at the end of the day, the focus here seems to really be on China and on trying to contain Chinese goods and Chinese exports. We've also seen eight framework deals. There have been a few more that have been semi-announced, but we see eight deals that have been fairly solid as well as the removal of de minimis exemptions. Goods that are $800 or less for around the world—that's happening later this month. We also saw the copper Section 232 investigation completed and implemented. We did see some interesting things come out of that, which include exclusion of some of the inputs that U.S. industry will require for industrialization and to continue moving supply chains in a country that doesn't produce many of those goods. It also called for a reevaluation of what was included in a year by the USTR. One of the other really interesting things coming out of that was a call for export control. Preventing some of the copper goods from leaving the United States is going to have a fairly small impact in the immediate future. The inclusion of that type of export control is an interesting signal that this may be a tool that is more widely applied by the Trump administration. We really haven't seen that used extensively in the past. Keeping an eye on and thinking through how that might be applied to some of these other product categories that we see under investigation is important. In the middle here, you'll see the announced reciprocal tariffs. The EU is kind of excluded here; it's painted at 15%. It also has a unique situation where its rates may go higher than 15%. It's a little variable, but you see most of the rates that were announced. Essentially, what I'd say here is that this is a very helpful initial headline figure, but at the end of the day, you need to evaluate the competitive landscape on really an industry-by-industry, company-by-company, really product-by-product basis and try to understand exactly how these are going to impact the competitive landscape for each of these. That's something that we are undertaking as we move forward with this announcement that happened on Thursday. On the right-hand side, you'll see some of the key takeaways. Essentially, I think the most important thing to remember as we're going through this, but also just from here on out, is that rates are going to change. None of these are set in stone. They all are determined by the President. We also have significant uncertainty around the specific deals that have been put in place. We don't really have trade deals per se. We have general agreements with very little written down. The U.K. is perhaps the only exception and maybe some fact sheets. Beyond that, it's really just the tariffs. The non-trade barriers that the President claims to have negotiated remain major disagreements. In a lot of these framework deals, we also expect to see more deals. Some of these tariff rates that you see on the map, I really expect to see change in the future. India is at 25% for instance, and the Trump administration is trying to bring a lot of pressure there on India at the moment and we expect that pressure to increase. We do expect to see at some point some kind of deal with India. We expect the Trump administration to continue to seek that out. In the meantime, we have a 25% tariff rate and that's pretty significant. It puts at a competitive disadvantage compared to Southeast Asia in a lot of areas. We also expect some deals to fall through or to change significantly. The Trump administration has come out and said there's still a lot of horse trading going on, there's still a lot of negotiation. There are many things that weren't even discussed. We've heard the lead Japanese trade negotiators essentially come out and say that implementation was never part of the discussion in his eight trips to D.C., and we have so many open questions, open disagreements between these parties. We expect significant disagreement and in some cases to see actual tariff threats to arise again, maybe even more likely with these framework deals compared to the countries where the United States just imposed a tariff level. We also expect to see continued political reasons for using tariffs, such as we see with Brazil, South Africa, with India. Continue to see those as a key driver of changes in these rates and also domestic pressure, primarily within the United States, as the Trump administration looks ahead to midterms, recognizes that some of these tariffs are counterproductive to the ultimate aims of the Trump administration to reshore manufacturing to the United States because they interfere with the movement of goods and they interfere with intermediates. We continue to see a lot of reasons to accept exceptions and changes, but overall, this kind of general gelling of the picture for where the United States is going, I think it's important to point out that the EU retaliation scenario was avoided. That's extremely significant for the short term macroeconomic outlook and at the end of the day may have consequences in terms of how much this is renegotiated. The short term outlook is much improved because we aren't seeing a tit for tat trade war between the U.S. and its largest trading partner, which would have pretty dramatic effects on the U.S. outlook as well as the EU 's outlook and global outlook. In addition, we still have big questions about transshipment. This is essentially the U.S. saying we are going to start tariffing goods that are deemed to have been avoiding U.S. tariffs and we're going to tax them an additional 40%. There are very few details about what this means, but there are indications that this may be a more stringent, much more stringent version of country-of-origin rules. We've been warning for some time now that country-of-origin rules are going to become more and more important in these various trade relationships. It seems like this is likely how it's going to actually be implemented, or at least the headline idea under which it's going to be put in place. The implementation itself is just very unclear. There are some hints of potential product trade pacts in some of these discussions, particularly in steel. There is some discussion around not just keeping Chinese goods out of the strategic supply chains that the Trump administration has identified, but actually potentially working with, for example, the U.K., with Indonesia, and others to combat overcapacity. It's an effort really to deal with this dilemma that comes up as you start to build protectionist policies that can lead to overcapacity. This is a maybe. It's unclear exactly what this is going to look like. Until there's some implementation details, we're as in the dark as you are. It's something we'll be keeping an eye out for. Next slide, please. I wanted to give a very quick overview of some of these agreements. I've run them from left to right of essentially the largest, the partners that the United States imports the most from. Starting at 18% with the EU to the least, Philippines and Pakistan are rounded 0%. Essentially what I wanted to do here is give you an idea of, one, why the United States pursued these particular agreements, but also some of the key issues that are still open. As we look at this, I think it's important to note that one of the things we've been looking for is this idea of a tiered system. We see Japan, South Korea, Mexico, and Canada in particular as important partners for the United States in a geopolitical sense, but also in manufacturing base and some of the things as crucial supports for what the Trump administration is looking to actually achieve. We would include the EU in that. There is some question about whether the Trump administration would. I think it's important to note that there was some possibility that would see those geopolitical relationships result in different tariff rates. For the most part, these really seem to be based on the actual trade deficit. One of the things that's interesting here is that these top line tariff rates, while there may be some additional pressure placed on some of the countries that have not reached deals, these rates seem to be fairly much set. I think the risk is going to be in the possibility of retaliation and the possibility of disagreements. Looking at the U.S. product concessions, this is where you really see those tiered relationships. The United States has some really important sectors. The Trump administration is very focused on producing internal U.S. manufacturing. I think there's been some recognition that the United States cannot go it alone in all of these segments. It would be very, very disruptive to attempt to do that right now. I think there's been some acknowledgment that some concessions needed to be given in these key segments like autos, semiconductors, critical minerals, and pharmaceuticals, something that's in the news today. At the end of the day, those aren't really discussions with some of these countries that have closer ties to China. Those are ties that aren't just political, but they're more actually in the supply chain realm. Essentially, these intermediates that are going into these types of goods that are produced in, for example, Southeast Asia, we also saw a big promise for investment. There's a lot of discussion right now about how exactly this is, what this is going to look like, how it's going to be carried out. There's disagreements. Japan said we didn't agree to give $550 billion. We didn't agree to these other terms. What we said was that basically we would loan this amount to Japanese companies. The Trump administration's telling of this is significantly different. We see similar disagreements with South Korea, with the EU, and we're waiting to see how that kind of shakes out. At the end of the day, state directed investment into the United States is very difficult to accomplish and very curious to see what mechanisms are actually put in place. This is another key point of disagreement and potential for the United States to essentially say, you're not living up to the handshake deal that we made. We also saw announcements of purchases. Again, it's unclear exactly how the states are going, the nations are going to direct these particular purchases. It's unclear how the United States is going to provide as much energy as has been essentially promised to be purchased. We have, again, a lot of uncertainty there. An administration is looking for countries that aren't living up to their side of the bargain. Finally, we see this kind of tiered relationship show up in some of these economic security provisions, many of which seem to be about promoting key U.S. industries. For example, the EU agreed to buy AI chips and to cooperate on metals. They say that they have a strategic industry, 0% for 0% tariff agreement with the Trump administration. As far as I've seen, and if you'll excuse me, a lot has happened over the last week. If I get something wrong, please give me a little bit of grace for that. As far as I've seen, the Trump administration has not come out saying that that was part of the agreement. We're seeing South Korea, for instance, planning to invest $150 billion in U.S. shipbuilding. That's one of the reasons that the United States sought out that South Korea partnership, among other reasons, having to do largely with defense and the geopolitical relationship. The United States reached an agreement for South Korea to invest in this segment. There are a lot of questions about how exactly that's going to happen. As we get into these smaller trading partners and partners that have more Chinese involvement in their economies in various ways, particularly their supply chains, you should see more focus on keeping Chinese goods out of these supply chains. Next slide, please. Next, I wanted to kind of talk about where we might go from here. We're given some hints about how set in stone these rates are. I think at the end of the day, we have some degree of certainty that we did not have before. We have a little bit of a bottom line figure and a bottom line understanding of where rates are going to be set. We also have a decent sense of what the market will react to and what Congress will react to. In addition, Adam Karson, our Chief Economist, has done some modeling to see where these effects really begin to, or where these tariffs really begin to take effect on not just the U.S. economy, but the global economy. You see each of these kind of marked. We have the baseline plus pause plus China Max. That's when we had 145% tariffs China. That shows the average effective tariff rate. Basically, trade-weighted tariff rate. We also have the Liberation Day tariffs, which caused a pretty strong market reaction in the bond markets in particular. We have the 20% mark for around where we expect to see some more significant changes to the U.S. economy. Of course, August 7th, we expect this to be about an 18% trade-weighted tariff on imports to the United States. It's important to keep in mind that the actual collected revenue is going to be lower than these. These are kind of like the headline figures based on 2024 data. There is going to be adjustment, things are going to change. This gives you a sense of where the line really is in terms of how much the Trump administration can change from here. We're only a few percentage points away from that 20% line. I think it's important to note that where those tariffs are changed is vitally important. If you look on the right-hand side, basically what you see is what each country has contributed to that effective tariff rate today. That's basically the tariff that's been placed on that country times its imports, or the United States imports from that country. In value terms, that gives you a sense of the scale that each country is contributing. What we see is that, as you'd expect, countries from which the United States imports more have bigger effects. If the United States puts a 10% share of tariff on China, we might see a 1.4% increase in these effective tariff rates, whereas the U.K. is a 0.2% change. Just to give you a sense of scale, and this is something that is continually in progress, we're going to continue to refine this. Just to give you a sense of scale, a rough direction of travel. We see that China, the EU, Canada, and Mexico, and really that rest of the world baseline tariff, are extremely important to where these rates ultimately land. With such a limited amount of space for the Trump administration to act without consequences or without significant reaction from the market, without the potential for recession, we're really running right up against that. As we look out at the Trump administration's focus on the midterms, we really expect to see an inability to have a sustained increase in tariffs much above these rates. Where that line falls exactly is an open question. I'd like to invite Adam on to speak to his modeling and how he kind of reached that 20% and how he sees this plan. Thanks. Yeah, we actually have a slide in the back towards the end here on some of the modeling we've done. I'll come back to that when you're done with your remarks, Melissa, but we've done a number of modeling scenarios. Really going back, we were reminiscing, we went back to March of 2024 when we started modeling out tariff scenarios. We've looked at just dozens and dozens of possibilities. What we found is when you get to this 20% threshold, that's when the macroeconomic impacts really start to bite. What I mean by that is in terms of the impact on inflation and how that's transmitted to consumers and the impact on consumer spending and then the impact on the overall economy and business investment and other key drivers, that 20% threshold seems to be right around where the impacts go from, I would say, mild to moderate or severe. Our modeling showed that at that 20% threshold, inflation impact is half a percentage point or higher. Economic growth slows down by up to a full percentage point. It depends a lot on how the market reacts and responds. One of the additions that we added to our modeling that we have not seen in a lot of third-party efforts is that we layered on the impact of market volatility and heightened uncertainty resulting from such a rapid shift and massive shift in U.S. trade policy. That's certainly what we saw in the first half of 2025. Uncertainty was a wet blanket on the economy. You saw that very acutely in business fixed investment. If you strip out any investment going on in AI, which was sort of its own thing, business fixed investment has been basically flat or in a recessionary kind of pattern over the past few months. Uncertainty and market volatility play a huge role that's not often captured in some of the standard macroeconomic models. That can really exacerbate some of the impacts. We felt that again, once you get above that 20% threshold, those things start to really compound on one another. We're right at that edge now. You show very nicely on this chart, Melissa, with the trade-weighted effective tariff rate at 18%. We're bumping up right against that threshold where the economic impact starts to really become material. Thank you. Appreciate that. I think the key here is really that we still have some significant uncertainty in the four largest trading partners. We have China, the EU, Canada, and Mexico. I'm going to dive into those each just very quickly here. We want to leave some time for questions and leave some time for Adam to talk a little bit more on the macroeconomic landscape. I do want to quickly touch on each of those four. I also want to say that we have the Section 232 tariffs that are still outstanding. We expect to see this inch up. As I said, there are likely more deals, but the percentage, the set tariff rate seems to be fairly well set for these countries. We're not seeing the likelihood of huge shifts that are likely to dramatically change this effective tariff rate downward, but we do see a lot of upward pressure from Section 232 product specific tariffs and also from the likely disagreements that we see ahead. Next slide please. Quickly looking at the European Union, kind of thinking through what all of this means, we did see that the all out trade war has likely been avoided. I would say it's not impossible, but we have the baseline tariff rate set and I think that it's widely viewed as in everyone's interest that that stay roughly where it's at. It doesn't mean we won't see volatility and threats, but we largely see disagreements within the Section 232 and product specific issues and then also on non tariff barriers that largely went unaddressed despite being extremely important to the Trump administration. We continue to see that the European Union, for instance, pushed back its retaliation six months in order to give this some space to develop, but that remains an option. I think what the EU has demonstrated though is that it's simply not willing to go into a tit for tat trade war. We do expect Europe to face economic and political reckoning. This is a long term issue. We expect to see some undermining of some of the industries that the European Union has been intentionally trying to build up in order to kind of meet this moment of big investments in local industry that we're seeing around the world, this industrial policy moment. We see that some of these specific agreements undermine some of that effort. One that's particularly notable is the United States has agreed to more or has pushed for more market access for some of its chemicals, and the EU has many times struggled to maintain its chemical industry in its current environment. We're going to be keeping a close eye on how that plays out, how the European strategic industries develop from here. At the same time, we are seeing the Europeans try to continue to advance investment and, for example, defense, try to spur these industries. With significant investment in strategic industries going to the United States instead of necessarily within Europe, it really puts the future of those in question. At the same time, there's a pretty big backlash to the way that the tariffs were ultimately negotiated. Fair or not fair, the EU faces some pretty strong criticism for the broader EU project, even from the far right, which we've seen has been growing pretty significantly as a political movement within various countries in the EU. Ultimately, we do see that Trump will probably struggle to finalize this agreement. It comes down to the amount of time it takes to reach an agreement and have it voted on within the EU. We see continued heavy disagreements on the particulars because, again, very little has absolutely been decided here. We see the EU as really probably buying time. One of the reasons it might not have pursued retaliation is essentially trying to buy that space in order to try and continue pushing for better deals, pushing one item at a time rather than trying to negotiate all items at once, which the Trump administration uses very effectively in its negotiations. Next slide, please. Looking at the China-U.S. outlook, we still see the China-U.S. relationship as in a strategic pause. That said, the United States is working hard right now to reach some kind of deal with China. I would imagine that's a fairly limited deal. We might be looking at purchases, something along the lines of the Phase One agreement that we saw from the first Trump administration. Again, this is more about strategic space than it is necessarily about reaching full agreement. The United States demands, many of them are structural for the Chinese economy. It seems like at the moment the United States, because it doesn't feel like it can go head to head with China with its rare earth critical minerals control, doesn't feel like it can necessarily push China to the same maximalist brink that we saw initially coming out of the Trump administration with 145% tariffs. We see that there's really an effort to step back and instead of necessarily create that leverage directly, maybe working with third countries to create some additional leverage and also really trying to box China's inputs out of the supply chain. We do see escalation as likely. Looking ahead, we have the shipping fees that are going to come into effect in October. We also have pretty powerful efforts out of Congress to continue to press China. I think at last count, about 50 bills, many of them with bipartisan support, are focused on containing China in one way or another. We also have the Trump administration's efforts to create leverage continue to drive that tension. It's very difficult to see China stepping back and viewing the Trump administration's efforts as anything but aggressive at this point, just because of the history that we saw. The maximalist approach that the Trump administration took at the beginning sent a very strong signal. Next slide please. On USMCA, we continue to see this as essentially a must have and that's true for all three parties. Because this is a very U.S.-focused policy, it's really important to take the Trump administration's view and look at the interdependence of the industrial base within the United States with Canada and Mexico. We've had Secretary Bessent come out and say specifically that he's very concerned about the steel tariffs and their impact on autos, so basically the movement of steel from Canada to the United States. We expect to see at the very least some carve outs, if not some progress on some of these products. The overall USMCA trade deal likely remains unresolved for now. We do see pretty steady pressure to continue in the meantime and expect the United States to occasionally really push these volatile policies. At the end of the day, the United States seems very keen to keep these particular tariffs within a more limited scope. We'll be keeping an eye on that for any shifts. For the moment, we see USMCA as kind of a back burner topic. Next slide please. Finally, I wanted to quickly talk about India. I do view the Trump administration's efforts to add the 25% reciprocal tariffs plus the possibility of secondary sanctions for purchasing oil from Russia as a key issue here. We see the Trump administration likely trying to in some ways separate India from what the Trump administration views as the sphere of influence of Russia and China and others. We see a similar effort with Brazil and to some degree some effort there on South Africa, t he BRICS nations. T he Trump administration seems to see these as a, this bloc, as some kind of a threat and is making a real effort here to use tariffs to wedge them apart. I do see India as likely resilient to a lot of this pressure. Part of that stems from just the scale of trade with the United States remains extremely small. There are a few industries where there are going to be concerns like pharmaceuticals. The Modi administration and many administrations before Modi saw India's ability to move between these various blocs as really key to its foreign policy. There's very little reason to think that that's going to shift now. We did expect to see a little bit closer alignment between India and the United States than we currently see, but it appears that the Trump administration is not happy with closer alignment and wants total alignment or something closer to it. What we're seeing is a real effort to make that happen. We expect a lot of volatility in this relationship. We expect it to take some time because neither side is going to feel a lot of pressure from this in the short term, at least in the policies that have been announced. If the Trump administration wants to get creative, we may see some more pain felt there. Ultimately the Trump administration and India really want a deal. The escalation really complicates how the United States is going to procure goods that are important to consumers in particular, such as phones, when the United States is attempting to move further away from China, which is a major producer of such goods. The effort to kind of build a new manufacturing base or build upon the Indian manufacturing base is really a question here. At the end of the day, again, see a lot of reason for these two sides to come through an agreement. I've talked a very long time. With that, I'd like to pass it off to Adam for a little bit to speak to some of the macroeconomic issues. Hey, thanks, Melissa. I'll just take like 10 minutes and then we'll go do some questions. I just wanted to highlight a couple points. First is just bring back a few slides from prior webinars. If you recall, this slide we presented before kind of gives a sense of where we thought tariffs might land. Based on what we thought would be in terms of tariff policy, what would be the most effective policy to achieve the administration's goals, which pointed us towards a baseline tariff between 10% and 20%, which Melissa just walked you through, we're probably around 18%. Right in that range, I think on the higher end of that range, I thought maybe we would be closer to the 10%, but it looks like we're going to be closer to 20% in any case. Also, then specific sector tariffs and intensified tariffs on China. We're basically, I would say, we're landing pretty much where we anticipated, plus or minus a little bit. I just want to highlight that to say, like this, it's kind of moving in a direction that we thought was fairly predictable. On the next slide, I'll just bring up a chart on what I talked about earlier in terms of the impacts of this level of tariffs. This goes back to a discussion we had back in March of 2024. Again, we've been beating the same drum in terms of the potential impacts of this level of tariffs on the U.S. economy. If we're looking at somewhere in the ballpark of 10% or higher tariffs on the rest of the world, 20%- 30% on China, somewhere in that range, it might be even a little bit higher than that. If you layer on impacts on market volatility and heightened uncertainty, you get into this sort of range of around 1.5 percentage points taken off GDP growth over the course of a year. Now we're fully implementing these tariffs. We're going into the second half of 2025. I think we're looking at this, the current level of tariffs taking off about a 0.5 percentage point of growth off of U.S. GDP this year, maybe even a little bit more than that, and then another 0.5 percentage point to a 1.0 percentage point in 2026. The models all have consistently been pointing in this direction. It's not a doomsday scenario by any stretch, but it is a headwind to growth. I guess the calculus is what is that? What does that achieve in the long run in terms of does it actually resource some U.S. manufacturing and restructure the U.S. economy in a more constructive way? That will be determined over the course of five to 10 years. The short term impact is going to be in the same 1.5 percentage points off of gross ballpark range. Now let me just take a step back on the next slide, Nick. Just a couple macro musings, if you will, some high level takeaways on where we see U.S. policy impacting the U.S. economy in particular. I just want to make a couple of points here. First is a point we've made before, that this type of policy is stagflationary, meaning it's negative for growth and pushes inflation higher. Again, not a doomsday scenario. I think the range we're looking at in terms of inflation is to add about 0.5% maybe slightly more than that onto core inflation figures in the U.S. That's enough to cause some concern for the Federal Reserve, but it's not like we're going back to 6% or 7% or 8% inflation. It's somewhere going to be in the low to mid threes, probably by the time it peaks. I just talked about growth. The flip side on stagflationary impacts is that this growth is lower. I just gave you a range to think about in terms of that impact. The impact on growth flows through mostly through the consumer channel. Higher prices impact real consumer spending, purchasing power, and then also have a negative impact on capital investment, which has been pretty stagnant over the past six months. The second question is sort of going down in level of granularity. What sectors are most impacted? It's pretty logical here. The ones that are most tariff exposed are the ones that are going to be most impacted. Consumer electronics, automobiles and parts, furniture, apparel, footwear, industrial metals, those sectors are, we're importing those goods from countries that are going to be hit with pretty high tariffs. In the short term you can do some maneuvering and sourcing from different locations, but the locations you would ship to still are going to be hit with higher tariffs. Those high tariff exposed sectors are, we think, going to be most negatively impacted in the short run. There's an interesting paradox for U.S. industries when you think about upstream versus downstream. Upstream being the sort of raw materials and intermediates, downstream being the industries that use those inputs for manufacturing. On one hand you can have some positive impacts to upstream sectors, the sectors that are protected. For example, steel and aluminum, we would expect to see higher production coming out of those industries. The downside is that all of the users of those raw materials and intermediates are going to be facing higher costs. Typically what you see is that there's a net negative impact to the overall economy from this dynamic, that the negative impacts to downstream industries outweigh any positive impact to upstream industries. This was the case in 2018 with the steel tariffs. We saw an increase in steel production and output from that sector, some employment in that sector, but at a higher cost to downstream industries. We expect that U.S. exports are most likely to be harmed under this current regime largely because of the higher cost to production in the U.S. U.S. exporters become marginally less competitive in a global marketplace because they're going to be facing higher input costs, so tougher for them to sell into the global market. Some of this might be offset by the weaker dollar, but we're going to have to see how retaliation plays out. Melissa did a great job of highlighting what other countries are doing and retaliation in terms of tariffs has been minimal really so far. There may be some non-tariff barriers that could hurt U.S. exporters. I'll wrap up with the fiscal impact. There is a positive fiscal impact of tariffs. We're going to raise north of $2 trillion in new revenue over the next 10 years. The question is at what cost? I s that offset by losses in tax revenue from slower economic growth? Also, tariffs are a pretty regressive form of a sales tax. The distributional impacts to middle and lower income households is disproportionate. Essentially you're going to have a regressive sales tax to pay to create a new revenue stream which we could debate in a separate conversation. We could debate whether or not that's the right kind of policy for the U.S. Finally, when are the losers. Just to echo some of the points that Melissa made at a nation state level, on a relative basis one could expect Mexico and ASEAN economies to do a little bit better in this scenario versus China and India. I think India is a really interesting example where you know that a lot of, a lot of companies were looking at India as a way to de-risk China and you know, a country with a lot of excess capacity where manufacturing could potentially grow. That's one we'll put a flag next to and say does this 25% tariff on India plus perhaps even more for buying Russian oil, does that make sense over the medium to long term for the Trump administration given the goals that they're trying to achieve. All else equal, we would expect kind of the trends we've seen over the past five, six, seven years of foreign direct investment into Mexico and ASEAN economies to continue and those manufacturing bases to grow. Those are just some quick highlights and takeaways from I think where we are currently with policy, on tariff policy. Probably no major surprises there. With that Nick, maybe we can take a few questions. Awesome. Thanks, Adam. Yeah, I'd like to ask Melissa a question we've got from the audience here about transshipment. As you called out earlier in the webinar today, Melissa, those were targeted in the executive order last week. The question is, when do you think transshipment will get better defined and how soon do you think implementation will be initiated? Unfortunately, the answer is we do not know. There is a lot of precedence that we've seen coming out of the Trump administration that many of these answers are going to take some time to fully be defined. In the meantime, we continue to expect people to get some interesting surprises along the way in terms of their import bills. We do see some effort by Trump administration officials to come out and start to define roughly what they think it might look like. We see some interesting proposals coming out of Congress, out of other administration officials, around what it may mean for the question of ownership, so who actually owns a factory within a country. We continue to see some kind of speculation around what the ultimate policy outcome might be. It's unclear if the Trump administration has fully defined it internally. Expect a good deal of uncertainty on this issue. Awesome. Thank you, Melissa. The question about tariffs imposed on Brazil and which products are. Okay, so it's sort of two part questions. Do we have any information on tariffs imposed on Brazil and also which products are excluded by Section 232? I think that might be the copper. I mean it could be a number of things actually, but we talked about the copper one today. That's kind of getting deep in the weeds. I wouldn't expect you to have that information off the top of your. Do you have any thoughts on that at a high level at least? You know, only at a high level. I would say that the Trump administration really excluded quite a few categories on its tariffs on Brazil. Whether the Section 232 categories were excluded, I'm not specifically aware of that. Given the history of the Trump administration trying to separate those tariffs, I would imagine that those remain in place. That's something we can check out factually. I do think that the Trump administration has tried to put some pressure here, but isn't trying to go all in, particularly on key sectors in these strategic industries. Thank you for that. I think at this point, maybe just any final takeaways. I got a couple questions just came in. Oh, so kind of maybe a quick follow up to the transshipment question around country-of-origin and how that is defined differently by each country. Yeah, this is a tough question. Anyway, since country-of-origin rules are defined differently, would transshipments be defined mainly by the U.S. rules? I think the concern here is that the United States can choose to impose these tariffs regardless of what the general agreement is internationally. I think whether others take up those rules is an open question. The United States can unilaterally impose these tariffs, and ultimately, yeah, it's likely going to be something that these other states enforce and act on. Okay. I have a question for Adam. You're talking about the timeline for impacts on some of these tariffs. We're looking at next year as being pretty significant impacts, especially if we see this movement over this 20% effective tariff rate line. We're also seeing the Trump administration really push for rates to come down, really pressuring the Federal Reserve, and we have the midterms in 2026. Ultimately, what are your thoughts around the interplay of those issues? That's a great question, Melissa. I think the Federal Reserve's in a really tough situation right now with facing a dilemma of the labor market cooling off. We saw the latest labor statistics come out last week, and they were not good, showed a significant cooling of the labor market. At the same time, we are seeing inflationary pressures start to pick up. The headline numbers are coming up a little bit, and underneath the surface, we're seeing inflationary pressures start to bubble. Now, again, go back to our modeling. We're not expecting inflation to explode, but it's moving in the wrong direction from the Fed's perspective. They have to be careful and thoughtful about their messaging and set expectations in the market and then to get their timing right in terms of tamping down any inflationary pressures if they were to get out of control. They have to weigh, essentially weigh whether sort of where they want to put their focus on the labor market or inflation and make a judgment about inflationary pressures, whether those things are going to be temporary or more sustained. I suspect that the Fed is going to cut rates one, maybe two times this year. It's really going to, they have until September to kind of until their next meeting and decision to cut rates. We'll see what happens with the labor market between now and then. If we continue to kind of move, if we move in a sideways pattern, which is kind of where we are right now, I think they could justifiably hold off and say, hey, let's wait and see until, see what happens with inflationary pressures. If the labor market deteriorates at a certain rate or a faster rate, then they may feel pressured to cut rates in September. Meanwhile, the inflationary pressures are probably not going to peak until maybe first quarter of next year. We've talked a lot about, you know, when is inflation going to come through in the U.S. economy and it really depends on inventory channels and how much inventory to draw down and that, that's a sector and company level issue. We've had a lot of trade pull forward on trade to build up inventories to even higher levels than normal. There's a lot of inventory still to go through. We suspect that those inflationary pressures are going to peak next year. It puts them in that predicament. We'll see. I would bet on a rate cut in December. I think it's up in the air. Rate cut in December, i t's up in the air whether we'll get a rate cut in September, and if we sort of hold where we are on tariffs or things escalate further, there's more uncertainty and how that impacts the U.S. economy. There's still a lot of variables there. I think the Fed has been wise to pause so far personally, and then we'll take some marginal actions in the fourth quarter As we l ook out at the possibility of additional easing. Is there a possibility that some of these negative effects will be pushed off past midterms and potentially give Republicans a little bit more time in Congress? I wouldn't hang my hat on monetary policy saving the day. Right? As we saw over the past couple years, folks may have heard the term long and variable lags. That became a popularized term, meaning there's a lag period between Federal Reserve action and then what happens in the real economy. I would not bet on, say, a 25 basis point or 50 basis point rate cut significantly changing the trajectory of the U.S. economy at this point. I think you would need more significant cuts than that to signal to consumers and businesses to spend more and also to kind of unthaw and unlock what's happening in the housing market, which is arguably in a recession right now. I think mortgage rates have to come down pretty significantly for that to unlock. All right, I think we're at time, slightly over, but thank you for that. The questions there, Melissa and Adam, and final question just seeing come in. Great timing. These slides will be emailed out as well as the recording. We send a survey out; technically, responding to that survey gives you a link to a page, and you can download the slides and see the recording. Look for that within a few hours. Thank you, Melissa and Adam, and thank you to our audience. Just stay tuned for our next webinar. I don't think we've quite announced the date, so again, follow us on LinkedIn and subscribe on our Vantage Point blog on our website. Thank you. Thank you, everyone. Bye bye.