Thread form upcoming @DowJones / @MarketWatch column by WWR's Paul Brandus
1/ Trump's trade war has disrupted supply chains, blown up market relationships that took years to build—just ask Midwest farmers—and added uncertainty that makes executives cautious about capex
1/ Trump's trade war has disrupted supply chains, blown up market relationships that took years to build—just ask Midwest farmers—and added uncertainty that makes executives cautious about capex
2/
and foreign investors think twice about investing in America. But don’t take my word for it, just follow the money. On the first point, capital spending, consider this: Trump boasted that corporate tax cuts would mean huge huge investment in the U.S. economy. It hasn’t worked
and foreign investors think twice about investing in America. But don’t take my word for it, just follow the money. On the first point, capital spending, consider this: Trump boasted that corporate tax cuts would mean huge huge investment in the U.S. economy. It hasn’t worked
/3 According to data compiled by New York investment bank Westwood Capital, just 28.6% of business investment has gone to “structures and industrial equipment” this year. Twenty years ago, at the end of another U.S. expansion, nearly half—48.3%—did
/4
Instead, the bulk of U.S. business investment now—52%—has gone into things like technology and intellectual property, which create value—just look at the long-term stock market gains of tech giants like Apple, Apple and Microsoft—but not jobs.
Instead, the bulk of U.S. business investment now—52%—has gone into things like technology and intellectual property, which create value—just look at the long-term stock market gains of tech giants like Apple, Apple and Microsoft—but not jobs.
/5 This isn’t the administration’s fault; manufacturing, as a percentage of U.S. jobs, peaked after WWII. But its claim that tax cuts would spark a robust manufacturing revival hasn't panned out. A modest boost, perhaps—but one set against a much larger opposing trend
/6
Also: some 6.8M Americans work for a foreign employer (2015 data), apps.bea.gov/scb/pdf/2017/0… so tracking foreign investment in the United States is more than a mere academic task. Foreign companies invest here when conditions are good, and and when uncertainty is minimized
Also: some 6.8M Americans work for a foreign employer (2015 data), apps.bea.gov/scb/pdf/2017/0… so tracking foreign investment in the United States is more than a mere academic task. Foreign companies invest here when conditions are good, and and when uncertainty is minimized
/7
Let’s follow the money once again. Here's how much foreigners have invested in the U.S. in recent years:
2015: $482B
2016: $486B
But in 2017? That figure plunged to $292 billion, a drop of 40%. Preliminary data shows it falling further this year.
ofii-docs.ofii.org//dmfile/FDIUS_…
Let’s follow the money once again. Here's how much foreigners have invested in the U.S. in recent years:
2015: $482B
2016: $486B
But in 2017? That figure plunged to $292 billion, a drop of 40%. Preliminary data shows it falling further this year.
ofii-docs.ofii.org//dmfile/FDIUS_…
/8
Why the -40% plunge? The Organization for Intl Investment, a trade group that represents U.S. subsidiaries of overseas corps: “a response to import tariffs and other trade actions from (Trump) as intl. companies hit the pause button on potential investments” That means jobs
Why the -40% plunge? The Organization for Intl Investment, a trade group that represents U.S. subsidiaries of overseas corps: “a response to import tariffs and other trade actions from (Trump) as intl. companies hit the pause button on potential investments” That means jobs
/9
Millions of Americans jobs depend on foreigners having confidence in America, and investing here - and when that confidence is wobbly, as it is now, that capital shifts elsewhere. People who say who cares what a bunch of foreigners think aren't thinking themselves. ##
Millions of Americans jobs depend on foreigners having confidence in America, and investing here - and when that confidence is wobbly, as it is now, that capital shifts elsewhere. People who say who cares what a bunch of foreigners think aren't thinking themselves. ##
