Foreign investment is considered good for the host country. Revenue is earned by investing in other countries abroad. The United States has been one of the leading countries with a lot of foreign investment. However, China has taken over as most countries are seeking to have investments in the country due to its massive economic outcomes. In the article Foreign Investment in the United States Dropping Dramatically under Trump by Rachel Layne, Trump has presided over one of the major shifts in the global trade winds by upending a lot of global trade deals. According to the article, foreign investments in through direct acquisitions and direct trade in real estate have gone down since Trump became president in 2016. Many scholars are predicting that it is the beginning of the end for an American world economy. The United States is becoming a less safe haven for foreign investment.
Surprisingly, the drop in the foreign direct investment is coming against a United States booming economy. The foreign direct investment in United States dropped by approximately $51.8 billion in the first quarter of 2018 (Layne, 2018). When the economy of the United States is doing well, the market should be more attractive to investors. In the past, government’s change of policy led to increased investment. The investors aimed at making as many deals as possible before the tariffs went up. It was meant at assuring access to the United States market. However, the opposite is currently happening in the United States market.
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The flight of investments to other countries is threatening to destabilize the American market. There are few high paying jobs that are available in the country. Just like in developing nations, investment in the United States market is advantageous to the country because it brings in employment opportunities. There are some businesses that bring in high paying jobs and thus help in improving the economy. However, since the administration of Trump came to power, the country is losing in terms of employment and better paying jobs since investors are considering friendlier markets. There are more changes that are coming aimed at further tightening the possibility of investing in the United States. The Congress is looking to expand the nation’s ability to scrutinize foreign investments that includes strengthening the laws that protect intellectual property. Many financial analysts view the move as aimed at curtailing China’s investment in America (Layne, 2018). In particular, the government of the United States views some investments, especially in technology, as baits used by other countries to gather intelligence. Therefore, the legislation will also include expanding the powers of Committee on Foreign investment to examine whether an investment poses a risk to America’s security.
The United States administration is thus overseeing a change of tact that is aimed at making America more secure even in the face of losing foreign investment and interfering with the economic growth of the nation. The new rules are viewed to be majorly motivated by the concerns about China. However, the scrutiny of investments is done for all nations including China. In fact, an earlier draft was viewed as more strict and would thus drive more foreign investment. The bill being proposed is a weakened version of the earlier draft. The administration is driven more by the growing insecurity hence the rush to secure any loophole that might give other nations an advantage.
References
Layne, R. (2018, Aug 1). Foreign investment in U.S. dropping dramatically under Trump. CBS News . Retrieved from https://www.cbsnews.com/news/foreign-investment-in-u-s-dropping-dramatically-under-trump/
