Of the 656,000 new US manufacturing jobs created between 2010 and 2014, two-thirds can be attributed to foreign direct investment, according to Reuters analysis of federal data.
Although more recent figures aren’t currently available, $700bn in foreign capital has poured in over the past two years, totalling $3,7tn by the end of 2016 – a world record for a six-year period.
Reuters’ analysis also revealed that the UK, Japan, and Germany spent a combined total of more than $300bn on US investments in recent years.
Direct investment by UK companies in the US was worth a reported $449bn in 2014, representing 15% of US total inward FDI. UK companies largely invested in the US manufacturing sector ($167bn) – mainly chemicals – and depository institutions ($60bn), which accounted for about half of the US’ total inward FDI from the UK.
China has dramatically increased the amount of investments it makes into North America, growing by more than 300% between 2011 and 2015. It’s expected that China will only increase its investments even further moving forward, alongside the likes of Germany and Japan.
Much of this investment targets Southern States, where foreign companies have made a home for themselves over the past few years. Mercedes-Benz recently finished an assembly plant for its Sprinter van in Charleston, South Carolina, employing more than 1,200 local workers; and Volvo Cars intends to complete its own South Carolina factory by 2020.
BMW has invested $8bn to construct a vast assembly plant in Spartanburg, South Carolina. The site has become the single largest exporter of vehicles by value for the entire country and BMW’s largest factory throughout the world. Earlier this week, the automaker announced it would invest an additional $600m into the plant, creating 1,000 additional jobs.
BMW’s board member responsible for manufacturing, Oliver Zipse, explained: “We have a big footprint in the US, and we are flexible enough. We will build the X3 not only in Spartanburg, we will split it into South Africa and then to China, so we will have some flexibility to produce cars somewhere else.”
Senator Lindsey Graham suggested the current administration’s tactics could severely harm an American workforce dependent on foreign companies. Graham is reported as commenting: “We have to negotiate a trade agreement with Europe, modernise NAFTA, don’t tear it up.”
Adding: “We’re going in the wrong direction. We need more trade agreements, not less.”