The cost of doing business under the current U.S. administration is getting more expensive and uncertain, said Cliff Kupchan, chairman at Eurasia Group, during the keynote session at the Canadian Investment Review’s 2025 Global Investment Conference.
Firms are operating under an increasingly uncertain investment climate in the U.S., he said, noting many of his organization’s clients are creating unofficial departments with the aim to get close to President Donald Trump or his administration and mitigate the subsequent risk. “That’s expensive and it drains resources from others. It’s a big new cost of business.”
Under Trump, the U.S. is facing a massive degradation in trust, he added, while the basis of U.S. economic policy relies on trust and expected predictability. “The [U.S.] dollar isn’t going anywhere quickly but the very bedrock of what the U.S. has brought to international economics is in play.”
Trump’s actions and challenges to the rule of law are pushing forward the executive theory of the presidency, which Kupchan called the notion that the U.S. President controls all aspects of the executive branch.
He attributed Trump’s consistent remarks about annexing Canada as the so-called 51st state to his personal dislike of former Prime Minister Justin Trudeau. Moving forward, he doesn’t expect the dialogue to be serious now under Prime Minister Mark Carney’s leadership.
“What Trump really wants, in my view, is cheaper access to resources and a cleaner access to the Canadian market.”
As part of the day to day at the Eurasia Group, Kupchan’s team assigns growth trajectories for various countries, including the U.S. In the 20 years of projecting these trajectories, this is the first time he’s seen a six- and 24-month negative trajectory expectation for the U.S.
“I do political risk and the [U.S.] is now the biggest source of political risk in the world, which is a remarkable fact.”
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The investing world is facing a new period backing away from globalization efforts by de-risking, hedging and leveraging against the U.S. and China, despite their roles as two of the leading nations in the world, he said. “I think the international system right now is weaker than at any point since the 1930s. . . . It’s not that we’re headed towards a global war,” he added. However, he noted the chance that the world is on the brink of a great power war is growing.
Kupchan noted he believes in some aspects of Trump’s presidential mandate, especially in the tariff policy strategy, and he said the president is taking the helm in decision-making, unlike his first term. “This is governance by personalistic rule. It’s what Trump wants and when he wants it — [a] much more centralization of power.”
Read more coverage of the 2025 Global Investment Conference.