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Trump FDI

It was only a little over one month ago that Mr Trump won a divisive election. Last month’s blog attempted to do what it had done with Brexit in the summer, and try to make a case as to why the result could actually boost investment. Irrespective of our own political views, as economic development professionals we must look or positives, in order for our communities to prosper.


At the same time, one of the key arguments for FDI remaining steady was the idea that Trump would have to be pragmatic in policy. It’s still too early to draw definite conclusions, but the campaign-style rhetoric has remained unpredictable – and a pivot to pragmatism has not really happened so far. We could discuss the potential for more Renewable Energy projects to come the US in the context of the Environmental Protection Agency / Energy Department appointees; or how provoking the One China policy may effect an increasingly important flow of Chinese investment to the country.


Outward & Inward

But perhaps the most explicitly FDI related policy statement from Trump so far, is around US outward investment. By punishing US firms that relocate operations overseas, and then export goods back to the US, the nature of global FDI would change. Firstly, the US remains the most important foreign investor in the world. Therefore a significant reduction in US FDI could have major implications for Investment Promotion Agencies globally, but Latin America and the Caribbean in particular. Secondly, Select USA is in a difficult position, where it will be trying to attract foreign companies while the government is attempting to limit FDI in the other direction.


Future Policy

Perhaps the policy is largely unworkable, and some of the economic arguments (such as the lack of a US supply chain in some industries) may prompt a rethink. The Carrier deal is probably not representative of the future, as there are specific circumstances (i.e. some operations are still moving to Mexico; the firm wants to win federal contracts etc). But nevertheless, there is likely to be at least some movement towards protectionism, a concern for international economic developers in any location.

Trump and FDI

Few commentators truly thought that Donald Trump could become President when he launched his campaign. But it’s happened, and global FDI will be heavily influenced by his Administration’s policy 
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