A recent survey of senior executives at international companies reveals both optimism and caution regarding foreign investment in the United States. The 2024 Inbound Investment Survey, conducted by the Global Business Alliance, highlights concerns about tax policies, regulatory challenges, and trade agreements among respondents. Despite these worries, there is a positive outlook on employment opportunities, with 60% of respondents expecting stable employment levels and 29% anticipating growth in the next six months.
However, the overall sentiment toward the U.S. business environment, as measured by the GBA U.S. Business Climate Index, has decreased to 69 points, reflecting a growing pessimism among executives. Factors contributing to this decline include regulatory changes and geopolitical tensions. Of particular concern are the proposed corporate tax rate increase to 28% and the perceived politicization of cross-border investment reviews, which could potentially impact companies’ operations and future investment decisions.
The recent Nippon Steel and U.S. Steel deal has also raised red flags for international investors, serving as a warning for potential barriers to expansion in the U.S. market. The Biden administration’s opposition to the merger, citing national security and job protection concerns, has sparked debate and uncertainty among executives. Companies, particularly from Japan and other allied nations, fear a rise in protectionism and its implications on their business strategies.
The survey results underline a strong consensus among respondents for more free trade agreements between the U.S. and other countries. Over half of the executives believe that pursuing additional FTAs with friendly and allied nations would encourage future investments. Currently, the U.S. has FTAs with only Canada out of eight major contributing countries to foreign direct investment in the U.S., comprising 75% of total FDI. GBA President and CEO, Nancy McLernon, emphasizes the importance of securing more FTAs to strengthen global partnerships and attract further international investment.
McLernon asserts that the Biden-Harris administration’s emphasis on trade as vital for America’s prosperity and competitiveness aligns with the survey findings. Encouraging more free trade agreements with like-minded global partners will demonstrate America’s openness for business and support the growth of international investments in the U.S. Despite the challenges and uncertainties highlighted in the survey, there is still a resilient optimism among international companies regarding the U.S. as an investment destination, with a focus on navigating the evolving business landscape.
