The official warm welcome that foreign investors receive in the U.S. may not be matched by common sentiment among the American electorate.
The United States has largely been a welcome environment for foreign investment. That’s part of the reason it is the leading country for foreign direct investment (FDI) inflow, which generally is defined as new construction projects, finance deals, and mergers and acquisitions. Japan is the number one investor into the U.S., followed by Canada, Germany, the United Kingdom, and Ireland.
The Inflation Reduction Act (IRA), the CHIPS and Science Act, and other recent U.S. policies have spurred more FDI into the country. South Korea has been the largest clean-tech and semiconductor investor into the U.S. since the passage of the IRA. SK Hynix, for example, recently announced a $3.9 billion chip plant in Indiana. Governor Eric Holcomb attended the announcement, saying he was “proud to officially welcome SK Hynix to Indiana.”
But the official warm welcome that foreign investors receive in the U.S. may not be matched by common sentiment among the American electorate. And the results of the November presidential election will chart two very different paths for the United States on a number of fronts, including its relations with Asia and U.S. policies on foreign investment, trade, tariffs, and protectionism.
A second Biden administration would likely maintain and seek to expand first-administration policies that have spurred billions in Asian investment in the U.S., such as the IRA and its electric vehicle tax credit. But former President Donald Trump’s camp has called for revising the IRA, including its electric vehicle tax credits, throwing Asian automakers and suppliers into uncertainty. This kind of proposed policy reversal doesn’t happen without the perceived support of a substantial base of voters.
