#202 – Inside Our Industry – FDI into the United States in 2022 – Part 1

Posted on | Inside Our Industry

We have shared information on Foreign Direct Investment (FDI) in the past. The following is part of a larger article that appeared on AreaDevelopment.com that looks at the latest information on FDI into the Unted States.

FDI into the United States in 2022

Over the last two decades, the amount of Foreign Direct Investment (FDI) into the U.S. has more than doubled from about $1.26 trillion U.S. dollars in 2000 to $5.26 trillion U.S. dollars in 2022.

The countries with the greatest amounts of foreign direct investment in the United States to date are Japan, the U.K., and the Netherlands. British, Japanese, and German companies have created the greatest number of direct jobs.

There are several geopolitical uncertainties which are currently influencing global investments. Interest rates are forecasted to fall in Europe and in the U.S. as inflation is seen as likely continuing to decrease. The pending presidential election in November 2024 is creating some uncertainty, however the Inflation Reduction Act (IRA), as well as the Chis Act (UK) still attract and incentivize many foreign companies to consider the U.S. for their new plant locations.

As tension between the U.S. and China grows, reshoring, or the trend of relocating manufacturing facilities in the U.S., has become very popular. Due to the war in Ukraine, energy costs have risen dramatically in Europe. Therefore, many companies, especially those in heavy manufacturing and other substantial energy users are favoring the U.S. for new plant locations. Simultaneously, a continuous flow of Chinese companies, and in particular, battery suppliers for the burgeoning electric vehicle (EV) activities are bringing about an additional wave of FDI to the U.S. Nevertheless, due to the growing political tension, these Chinese investors are facing an increasingly challenging landscape.

Next week we will share more information from this article that reviews some challenges for FDI projects in the U.S.