Foreign direct investment into the United States increased by about $ 331.2 billion to $ 4.46 trillion at the end of 2019 from $ 4.13 trillion at the end of 2018, an increase of $ 157.3 billion from Asia and the Pacific, especially Japan. On the industry side, companies in manufacturing, finance, insurance, and wholesale trade were responsible for the biggest increases.
A statistical report on the US Economic Analysis Office – distributed by the American Trade Mission in Geneva – says the 2017 tax cuts law on US direct investment abroad, still positively affects investment growth, and the law generally abolished taxes on stock dividends, or profits returned to American multinationals from their foreign subsidiaries.
In 2019, dividends fell by $ 454.5 billion to $ 396.3 billion from $ 850.9 billion in 2018, but still more than double the average annual earnings per share for the past 10 years of the tax cuts law, the report says.
According to the country, more than half of the 2019 profits from subsidiaries in three countries, Ireland “$ 85.8 billion”, the Netherlands “$ 74.3 billion”, and Bermuda “$ 67.9 billion” were returned. In terms of industry, US multinationals in the chemical manufacturing sector “$ 99.6 billion” and the manufacture of computers and electronic products “returned $ 92.5 billion”, nearly half of all profits in 2019.
Direct investment abroad
The report says that American multinationals invest in almost every country, but their investments in subsidiaries in five countries represented more than half of the total investment at the end of 2019. The American direct investment position abroad remained the largest in the Netherlands at $ 860.5 billion, followed by Britain “851.4 billion dollars”, and “Luxembourg” 766.1 billion dollars. Canada climbed “$ 402.3 billion”, one position from 2018, to be the fourth largest future economy for American investment, taking Ireland “$ 354.9 billion” to fifth place.
In terms of geographical regions in the world, the direct investment of the United States abroad reached $ 3.6 billion in Europe, $ 955 million in Asia and the Pacific, $ 912 million in Latin America, $ 75 million in the Middle East, and $ 43 million in Africa.
On the one hand, the foreign company’s branch directly owned, investments were heavily concentrated in holding companies, which accounted for about half of the overall investment in 2019. Most of the holding company’s subsidiaries, Americans owned by Americans from a variety of industries, own other foreign subsidiaries. In terms of multinational parent companies in the United States, their investment in manufacturing accounted for 51.9 percent, followed by finance and insurance companies 12.8 percent.
And US multinationals earned $ 532.7 billion in 2019 on their cumulative investments abroad, a decrease of 2.1 percent from 2018.
direct foreign investment
In terms of the foreign mother country, five countries represented more than half of the total investment inside the United States at the end of 2019. Japan rose one position in 2018 to be the first investing country in 2019, amounting to 619.3 billion dollars, which pushed Britain “505.1 billion dollars” to Down to the second position, Canada turned “495.7 billion dollars”, and the Netherlands “487.1 billion dollars” to the third and fourth in terms of investment, and Germany remained “372.9 billion” the fifth largest investing country at the end of 2019.
In terms of the final beneficiary country, the first five countries were Japan “644.7 billion dollars”, Canada “580.8 billion dollars”, Germany “522.0 billion dollars”, Britain “446.2 billion dollars” and Ireland “343.5 billion dollars”. The investment from the Netherlands and Luxembourg was much less than the investment in the foreign mother country, which indicates that much of the investment coming from these two countries was ultimately owned by investors in other countries.
In terms of geographical regions in the world, foreign direct investment in the United States amounted to $ 2.9 billion from Europe, $ 859 million from Asia and the Pacific, $ 194 million from Latin America, $ 29 million from the Middle East and $ 9.8 million from Africa.
Foreign direct investment in the United States was concentrated in the American manufacturing sector, which accounted for 40.1 percent of total investment. There were also significant investments in finance and insurance “12.3 percent” and wholesale trade “10.5 percent”.
Foreign multinationals earned $ 208.1 billion in 2019 on their cumulative investments in the United States, an increase of 0.8 percent from 2018.