Economic Uncertainty to Favor Commercial Real Estate

Trade Policy Shifts and Economic Uncertainty​

The United States has escalated its Tariff Policies​

• Mexico, China, and Canada are the U.S.’s three biggest trade partners accounting for 41.5% of goods imports in 2024​

• U.S. President Donald Trump’s new 25% tariffs on imports from Mexico and Canada took effect on March 2, 2025​

• President Trump also issued a new Executive Order on March 3, 2025, to increase the 10% tariff on all imports from China to 20% on March 4, 2025​

The United States faces economic risks​

• The Atlanta Federal Reserve Bank has updated its GDP forecast for Q1 2025 from a -1.5% contraction to a -2.8% contraction, but noted that this is a modeled estimate ​

• The implementation of tariffs pose could slow economic growth and increase inflationary pressure​

The Economic Policy Uncertainty Index has risen to its second highest level in history, but does create some…​

• Heightened uncertainty creates a variety of challenges, including indecisiveness from businesses and volatility in the financial market​

• As uncertainty rises, investors may continue reallocating capital toward hard assets such as real estate, seeking stability​

​Sources: Marcus & Millichap Research Services, U.S. Census Bureau ​

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