Chief Economists Outlook May 2025

26Chief Economists Outlook A majority of chief economists (84%) also highlighted the strategy of shifting production and investment to regions less affected by tariffs or export controls as a likely option. By relocating manufacturing facilities and capital investments to more stable markets, companies can circumvent restrictive trade policies and maintain competitive advantage. However, uncertainty about geoeconomic alliances and trade policy weighs on this approach in the short term. Relocating back to the US is an option some companies are choosing.61 Businesses could also increase policy monitoring and political engagement in key markets to stay ahead of regulatory changes and influence policy outcomes (76%) in a bid to align future operations with new geopolitically driven opportunities in specific sectors and geographies (84%). While these strategies offer potential benefits, they also require careful navigation of evolving risks and may demand significant organizational resources. Conversely, reducing exposure to geopolitically high-risk markets (84%) could be a defensive strategy to minimize potential losses. Chief economists also expect businesses to increase organizational capacity and agility (62%) and to enhance strategic and organizational diversification (62%) to reduce reliance on any single market or product line. Given that most options are considered to be likely by chief economists, the complexity of the current environment means that businesses will need to balance proactive adaptation with the risk of overextending resources or delaying critical decisions. 61 Smith, G. et al. (2025).