IDA says Trump rhetoric not helpful for FDI 

US President Donald Trump said this week that he wants to punish US companies for establishing operations, and creating jobs, overseas.

The IDA has labelled comments made by US President Donald Trump as being "concerning" and “not conducive” to the continuity of foreign direct investment (FDI).

Mr Trump said this week that he wants to punish US companies for establishing operations, and creating jobs, overseas.

He told a White House press conference that he intends to curb the US economic relationship with China, punish any American companies that create jobs anywhere overseas, and to forbid those that do business in China from winning federal contracts.

“We’ll manufacture our critical manufacturing supplies in the United States, we’ll create ‘made in America’ tax credits and bring our jobs back to the United States and we’ll impose tariffs on companies that desert America to create jobs in China and other countries,” he said.

“If they can’t do it here, then let them pay a big tax to build it someplace else and send it into our country,” he said of US corporations. “We’ll prohibit federal contracts from companies that outsource to China and we’ll hold China accountable for allowing the virus to spread around the world.” 

A spokesperson for the IDA said that, while such rhetoric is not exactly new, this kind of talk aimed at US multinationals is "concerning" as it could create uncertainty amongst potential investors.

“Nationalist and protectionist sentiment is nothing new. It has been around for some years now and not just in the US," they said.

“It is concerning in that it causes uncertainty and that is not conducive to investment – investors like certainty. But globalism over the past decades has been a driver of economic growth and development, helping to develop the economies of many countries and few will want to give that up.

"IDA Ireland continues to work to attract investment in the face of prevailing political and economic conditions as it always has."

In July, the IDA warned that foreign multinational companies are likely to create fewer jobs in Ireland this year, while more job losses than normal in existing multinationals are also expected.

Despite a resilient inward investment showing in the first half of the year, IDA chief Martin Shanahan said, at that point, that the second half of the year would be more uncertain.

He warned that Covid-19 is likely to “significantly reduce” global flows of FDI over the remainder of this year and into 2021. That said, the IDA is still aiming for full-year growth in net job creation numbers for 2020.

Mr Trump didn’t say when he would implement the policies but framed the moves as part of a second-term agenda. 

Directly turning the conversation towards November's US presidential election, Mr Trump said in his address: “If Biden wins, China wins because China will own this country.” 

“It’s the most important election in our history, right now, most important election in our history. Under my administration we will make America into the manufacturing superpower of the world and we’ll end our reliance on China once and for all," he said.