By producing goods for U.S. markets in the U.S. and for European markets in Europe, Honeywell significantly reduced its direct exposure to tariffs. While this provides resilience, the company acknowledges the unavoidable risk inherent in globally sourced components and raw materials.

The U.S. industrial strategy isn't pure "reshoring" but "friend-shoring." The goal is to build a global supply chain that excludes China, not to bring all production home. This creates massive investment opportunities in allied countries like Mexico, Vietnam, Korea, and Japan, which are beneficiaries of this geopolitical realignment.

The expected outcome will maintain Mexico's critical tariff-free access to the U.S., supporting current manufacturing. However, it will fall short of providing the strategic updates needed to catalyze a full-scale acceleration of near-shoring.

Because U.S. tariff levels are likely to remain stable regardless of legal challenges, the more critical factor for the long-term outlook is how companies adapt. Investors should focus on corporate responses in capital spending and supply chain adjustments rather than the tariff levels themselves.

Countries like Japan and the EU are unlikely to abandon their trade deals with the U.S. The deals address other tariff types (like Section 232 steel tariffs) that are still in place. Furthermore, no nation wants to risk provoking an unpredictable President Trump, who could retaliate in non-tariff ways.

When trade policies force allies like Canada to find new partners, it's not a temporary shift. They build new infrastructure and relationships that won't be abandoned even if the political climate changes. The trust is broken, making the economic damage long-lasting and difficult to repair.

The credit's requirements for North American manufacturing and sourcing from trade partners were designed to counter China's dominance in the EV supply chain. Its elimination undermines this strategic goal, leaving tariffs as the primary, less effective tool.

The Trump-era tariffs are not a temporary political maneuver but a lasting shift in U.S. economic policy. This reflects a broader, bipartisan move towards "spherification," prioritizing supply chain resilience and national security. A future Democratic administration is expected to maintain them.

The review is expected to maintain the core trade agreement and resolve disputes, but ambitious updates on AI, critical minerals, or China will be postponed or handled via less formal side agreements, thus limiting the full potential of near-shoring.