At a White House press conference in early September 2020, US president Donald Trump said that he will “impose tariffs on companies that desert America to create jobs in China and other countries”. This statement is a recent example of his assault on US firms that have set up operations in China — in many cases leading to the loss of American jobs.

fDi Markets data indicates that his strategy has paid off, with US companies across all sectors announcing fewer greenfield projects in China during his administration than when his three most recent predecessors held the Oval Office. In 2020, US-sourced projects into China were at their lowest level in the first half of the year since records began in 2003.

Mr Trump’s hopes to dissuade US producers from investing in China has also borne some fruit — particularly in manufacturing, with 67 fewer outbound manufacturing projects announced during his term than in Barack Obama’s second. 

US companies have also announced fewer greenfield investments in Russia under Mr Trump than his predecessors, consistent with US economic sanctions that are still imposed on Russia since their annexation of Crimea from Ukraine in 2014.

Meanwhile in the UK, with which the US has a supposedly ‘special relationship’ based on historical ties, outbound investment by American companies was at historic highs in both Mr Obama’s second term (1,400 projects) and Trump’s presidency (1,460 projects). 

Unstirred by USMCA  

Closer to home, Mr Trump’s policies have seemingly had little effect on outbound investment. Despite the uncertainty caused by the president’s renegotiation of Nafta — the trade deal between the US, Mexico and Canada which Mr Trump called the worst in history — US investors appear unperturbed. 

The long-term trend of US greenfield investment into Mexico has continued, with the number of outbound projects increasing in every presidency since George W Bush’s second term, and reaching  a record 526 projects during Mr Trump’s time in office.

Similarly, outbound investment projects into Canada stood at their highest point under Mr Trump, having grown by more than 20% since Mr Obama’s second term.

Covid bites

While these trends are indicative of the influence that Trump has had on outbound investment, the global pandemic has shifted many investors’ plans. The latest fDi Index — which tracks foreign investor sentiment — found that US investors have also become more inward-looking as a result of the coronavirus, committing to twice as many domestic inter-state projects as outbound projects during the first eight months of 2020.

Part of a six-part feature that first appeared in the October/November edition of fDi Intelligence.