If U.S. economic hegemony is fading…
…will it position as the top global destination for FDI fall as well?
In a word, we say no. But to the casual and not-so-casual observer alike, the global landscape appears to be at an inflection point. We’ve enjoyed more than 70 years of U.S.-led stability and prosperity—but there are questions on the horizon.
The risks are legion. Brewing trade wars, a broadening appetite for protectionism, populist leaders rising to power across many countries, the ascension of China, an at-times strained Western Alliance, and ever-evolving cybersecurity threats are just several and offered in no particular order.
In spite of these challenges, the U.S. remains the world’s top destination for foreign direct investment. At least for now. Here’s why:
Economic strength and stability – The U.S. economy is less than 1.5 times larger than China’s, but per capita consumption in the U.S. is 12 times greater than in China. This simply means more goods and services are available per consumer, and they are in a better position to buy them.
Productivity – Many businesses consider increased consumption to be the holy grail, but to economists, the key to growth, both long and short term, is productivity. Despite the low-productivity world in which we currently live, U.S. labor and capital productivity stand out among its peers.
A business-friendly regulatory environment – Some of the foundational ways that is pursued include lowering the cost of doing business, shortening the timeframe for federal project review, and reducing and simplifying regulations that are deemed unnecessary or economically harmful.
Commitment to objective jurisprudence – The U.S. judicial system is built upon a tradition of fair adjudication, recognizing the value of ensuring a robust intellectual property system.
Receptivity to foreign investment – Many U.S. states actively work to encourage FDI through various financial incentive and tax credit programs as well as targeted legislation designed to address specific company priorities. A more competitive federal corporate tax rate only fortifies this scenario.
Combine these factors with the benefits of unparalleled technological innovation, a skilled and ambitious workforce, and state-of-the-art R&D capabilities and multinational companies across the globe continue to seek to expand their presence in the U.S.
In these pages, we explore foreign direct investments into the United States. Simply put, this report—much like our U.S. International Corridors business—is intended to help multinational executives cut through the macroeconomic and geopolitical noise and make better-informed cross-border investment decisions with confidence.
For more information, download the full report below.
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.