Onshoring Boom, Energy Exports, and AI Could Push US GDP Growth Toward 5%

When German Chancellor Merz recently said America has been “humiliated” by Iran, it irked President Trump, who announced that the U.S. would be withdrawing 5,000 troops from Germany. Furthermore, President Trump has threatened 25% auto tariffs on the European Union (EU) because he says that the EU has failed to comply with the existing trade agreement, which has a 15% auto tariff.

The truth of the matter is, the Trump Administration has been conducting a full-court press to get the German auto industry to pick up and move more of its production to America, since they already have huge plants in Alabama, South Carolina, and Tennessee. Even Porsche may have to sub-assemble some of its premium vehicles at VW’s new Scout Motors plant in South Carolina by shipping engines and transmissions from Germany to circumvent tariffs. Since electricity in the south is only about 25% of what green energy costs in Germany, there are other economic incentives to move more production to America.

It will be interesting just how much all the onshoring to America will boost GDP growth. The Atlanta Fed is now estimating 3.5% annual GDP growth in the second quarter, but I expect that will be revised higher and may actually hit a 5% annual pace from all the onshoring, increasing energy exports, AI-fueled productivity gains, and improving consumer spending. In fact, I expect 5% annual GDP growth to occur no later than the third quarter this year.

Stocks are naturally a great inflation hedge, and many stocks are benefiting from the chaos surrounding the Strait of Hormuz, especially the shipping stocks I recommend: Scorpio Tankers Inc. (STNG), International Seaways (INSW), Okeanis Eco Tankers (ECO) and Tsakos Energy Navigation (TEN).

Investors are increasingly confident that the U.S. is the safest place in the world to invest. Foreigners now hold a record $9.5 trillion in U.S. Treasuries and are also expected to benefit from an appreciating U.S. dollar due to stronger economic growth as well as higher interest rates than available in China, Japan, and the EU. Finally, the U.S. has better demographics than most countries, so its potential for future economic growth is simply unmatched.