A few decades ago foreign companies establishing footholds in markets in America were an inevitable path for firms with ambition — but no longer.

The US Bureau of Economic Analysis reported last July that expenditures by foreign direct investors to acquire, establish, or expand US businesses totaled $420.7bn in 2015, an increase of 68% from 2014, when expenditures were $250.6bn. In 2015, as in 2014, the majority of the expenditures were to acquire existing businesses. In 2015, investment for acquisitions were $408.1bn.


Spending to establish new US businesses were only at $11.2bn, and expenditures to expand existing foreign-owned businesses were $1.4bn. Planned total expenditures, which include both actual and planned future expenditures, totaled $439.2bn.

The largest source country was Ireland, at $176.5bn but this nearly 42% of the investment in 2015 was mainly by fake Irish companies — in effect American companies that were Irish for tax purposes with operational headquarters in the US and legal headquarters in Ireland.

The data likely includes so called "tax inversion" investments by American entities in other countries besides Ireland.

By industry, 2015 greenfield expenditures were largest in real estate and rental and leasing, at $6.2bn, accounting for about half of total first-year greenfield expenditures.

Within manufacturing, expenditures were highest in chemicals, mostly in pharmaceuticals and medicines.

The Economist wrote this month that the share of private output has been flat at about 6% since 2000. The share of sales that European firms make in America has declined from 20% in 2003 to 17% now, according to Morgan Stanley, a bank.

Foreign firms’ profits in America fell from $134bn in 2006 to $123bn in 2014, the latest year for which figures are available. Their return on equity fell to 6%, compared with 11% in 2006. American multinationals make 12% on their home turf.

The Economist adds that 1) leadership in technology benefits US firms 2) Waves of mergers and acquisitions have raised the barriers to entry for outsiders. "If you split the world’s companies into 68 industries, American firms are the largest in two-thirds of them. Foreign companies in America are often subscale and too small to buy the leading firms in their sector. So they try to grow organically or buy weaklings instead." 3) foreign firms believe that US firms benefiting from teh cash nexus with politicians, are treated better when it comes to regulation and enforcement; "many European bosses believe that the cumulative $70bn of legal costs and penalties they have paid or currently face far exceed those that General Motors and ExxonMobil paid for similarly grave mistakes."

The newspaper says that in the era of Trump, foreign firms need "to assume a more American identity. In sensitive sectors, they already try to take on a local character."

Foreign companies, investing in US, Trump