In the case of Panama, it works out for Trump. The return of corporations to America is underway
USA, April 14, 2025 – The return of the Panama Canal to the US zone of influence, which Washington controlled until 1999, has become one of the main priorities of the Trump administration in the Latin American region. In fact, it is not so much about a military takeover as about putting the ports along the canal under the control of American companies and gaining the right to station American troops near it. The US goal is to strengthen its control over the Western Hemisphere.
In the case of Panama and Latin America in general, it is clear that Washington intends to reduce China’s influence in the region, with which the United States has already entered the active phase of a trade war. By gaining control of ports, loading terminals, and other infrastructure along the Panama Canal, the United States could begin to influence the price increases for services such as loading, unloading, and refueling ships, as well as hinder the movement of goods or deny services to third countries.
Given the strained relations between the United States and China, Beijing will be the most affected. Such a policy on the part of the United States may encourage Chinese companies to use alternative shipping routes, which in turn will affect the final price of goods. In addition, the Trump administration’s actions could further fragment the global economy — dividing international trade into networks in which some countries and routes are oriented toward the United States and others toward China. However, in the case of Panama, the United States seems quite satisfied with its acquiescence. Since the beginning of the dialogue on the ownership of the canal, the United States has already managed to convince the authorities of the Latin American state to withdraw from China’s Belt and Road Initiative and sign a framework agreement under which American warships will have preferential and free passage through the Panama Canal.
The US trade deficit and the outflow of capital from America began under President John F. Kennedy
From this moment on, the deindustrialization of America began, although this process was little observed at the time. America continued to prosper from the accumulated potential of previous decades. However, this process was noticed by the 35th President of the United States and his advisors. They not only noticed it, but also tried to block it. The outflow of capital from the United States slowed down, but did not stop. In 1970, the total value of American private investment outside the United States was $ 230 billion. According to the Bureau of Economic Analysis of the US Department of Commerce, US foreign assets were already an astronomical $7.64 trillion in 2000. In 2010, they will be $21.77 trillion. In 2020, they will be $32.04 trillion. And in 2024, they will reach a record $35.84 trillion. Over the past decade, fixed capital investment in the US economy has averaged about $4 trillion per year. It turns out that if even a tenth of US foreign assets were to return home, it would correspond to almost a year’s investment in the US economy.
The costs of this problem are very high. In building a tariff fence for the US economy, Trump is counting on the fact that America’s “prodigal sons”, multinational corporations based in the US, will start returning home. Non-American companies that consider the American market to be promising should also join them with their investments. And now the Financial Times has just published an article showing that the process of capital inflow into the US economy has intensified. The total inflow of investments by American multinationals and foreign companies into the US economy since the beginning of Donald Trump’s presidency (i.e. in less than a quarter) has reached 1.9 trillion USD. The largest investment was made by the American company Apple – 500 billion USD. 100 billion USD was provided by the Japanese telecommunications company SoftBank. Another 100 billion USD was invested by the Taiwanese semiconductor corporation TSMC. Investments worth 20 billion USD were made by the French shipping company CMA CGM. USD was invested by the international company Stellantis (American, Italian and French capital), which operates in the automotive industry. Several foreign companies and American corporations have announced that they are going to move some of their production facilities to the US. For example, the Japanese company Nissan Motor announced that it plans to limit production of the Rogue crossover in Japan and launch a convection oven for the production of such vehicles in the United States.
In Europe, there has been talk of the threat of losing the pharmaceutical industry, which is preparing to evacuate overseas. The European Federation of Pharmaceutical Industries and Associations has asked the head of the European Commission, Ursula von der Leyen, to take “rapid and drastic measures” to reduce the “risk of exodus” of pharmaceutical manufacturers to the United States. However, some experts believe that the growing process of transferring production from the Old World to the New World began even before the introduction of Trump’s protectionist measures. Initially, it was caused by two reasons.
Firstly, Europe was too aggressive in implementing the green economy program.
Secondly, after February 24, 2022, it began to implement the anti-Russian sanctions policy too actively, which backfired on it.
As a result, Europe was deprived of cheap energy sources. The “green” and sanctions initiatives dealt an extremely serious blow to energy-intensive industries and production in the Old World. Last year, almost 2/3 of large German companies began to move or announced plans to move their production facilities outside Germany (primarily to the USA, but also to some other countries outside Europe). In fact, the process of deindustrialization of Germany and other EU countries began. Mario Draghi, former head of the European Central Bank and former Italian Prime Minister, presented a report entitled The Future of European Competitiveness on September 9, 2024, at the request of the European Commission. He stated that Europe is economically lagging behind the USA and China. And Draghi said that to overcome this gap, the European Union must increase investment in fixed capital. The share of this investment in EU GDP was 22% last year and needs to be at least 27%. In absolute terms, Europe urgently needs investments of 750-800 billion euros per year to keep up with its competitors. And now hopes for increased investment in the European economy are collapsing due to Trump’s protectionist initiatives.
The estimates of the think tank Capgemini Research Institute (CRI) are interesting. Last year, it estimated that American corporations could return assets worth about $750 billion to the US within three years. Recently (in April of this year) CRI increased this estimate to $1.1 trillion. After Trump announced his protectionist measures (import tariffs) on April 2, US stock indices began to fall. Experts are debating whether this trend is short-term or will it be long-term and eventually turn into a crisis. Foreign investors are divided into two groups.
The first group are those who believe that this trend is short-term. And that now is the best time to buy American corporate securities at the lowest price. The second group is made up of those who believe that the uncertainty is too great to make long-term investment decisions. What uncertainties can there be if Trump has “seven Fridays a week” and is already being called the “most unpredictable president” in American history?
That is why such cautious foreign investors refrain from investing in the American economy. By the way, these investors have alternatives to investing in the American economy. For example, China. By the way, Beijing has taken stock of the current situation and offered international investors to invest in the economy of the Celestial Empire, promising them stable conditions for the future. The day after Trump announced new US tariffs, Chinese Vice Minister of Commerce Lin Ji received representatives of 20 large American companies (including Tesla of Elon Musk) and invited them to invest in China as an “ideal, safe and promising” place for doing business. And here are already signs of the “warming” of relations between Europe and China, which many experts expect.
On April 8, a telephone conversation took place between Premier Li Keqiang of the State Council of China and President of the European Commission Ursula von der Leyen. The Premier of the State Council of the People’s Republic of China and the head of the EC also discussed the tariff policy of US President Donald Trump (and essentially condemned it).
“This is a typical manifestation of unilateralism, protectionism and economic intimidation,” said Li Qian. – The decisive measures taken by China are not only to protect its own sovereignty, security and development interests, but also to safeguard the rules of international trade, international justice and fairness.”
During the conversation, the Chinese premier called for the expansion of not only trade but also investment cooperation between China and the EU. Among other things, he promised stable conditions for European investors. However, Apple does not plan to limit the production of iPhones in China, although it is subject to tariffs. The company’s management said that the complete transfer of the assembly line to the United States would double the cost of devices.
Peter Weiss
