Major institutional investors are reducing their exposure to U.S. markets amid President Donald Trump's tariff policies, the proposed 'revenge tax' on foreign investors, and rapidly rising government debt. According to Goldman Sachs data, foreigners sold $44 billion in U.S. stocks over the past two months, with year-to-date net withdrawals reaching $31 billion. The foreign investment tax proposal, outlined in Section 899 of the One Big Beautiful Bill Act, would impose levies starting at 5% and rising to 20% on equity investments from countries with digital services taxes and other measures deemed unfair to U.S. companies. The measure could affect countries comprising more than 80% of all foreign direct investment into the United States, including Canada, France, and the United Kingdom. The Tax Foundation estimates over $500 billion in foreign income could face tax increases. Following Trump's April 2 Liberation Day tariff announcement, major investment banks such as Goldman Sachs have moderated risk-taking and increased liquidity buffers. Goldman Sachs President John Waldron described this as a 'sensible' response to ongoing volatility and noted that the current U.S. budget is projected to add $2.4 trillion in new debt over the next decade. The U.S. dollar has declined 9% year-to-date, while the S&P 500 index is up less than 2% for the year, compared to a 9% gain for the Stoxx Europe 600. European markets, viewed as more stable, have benefited from the shift in sentiment. Canada's Caisse de dépôt et placement du Québec, which previously had 40% U.S. exposure, is among institutions increasing allocations to the UK, France, and Germany. Pension funds and retirement accounts have also been affected by market turbulence, with average managed pension funds down slightly for the year. Analysts highlight that ongoing trade tensions, policy unpredictability, and mounting debt burdens are influencing investor decisions regarding U.S. assets.