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EXPERT COMMENT

US democratic backsliding and diminished support for global norms may undermine investor confidence in the US and affect the ability of American companies to do business abroad.

Traditionally, American business has relied on the relative stability and predictability of the nation’s governance – despite the turbulence of domestic politics – and on US support for the institutions and norms underpinning the rules-based international order.

That stability is now being upended by the policies and actions of the Trump administration. This not only poses severe challenges to the US, international security and global economy but also to US multinational corporations and institutional investors.

President Trump’s economic policies, including much higher and deeply uncertain trade tariffs, are beginning to undermine confidence in the US as a financial ‘safe haven’. An inward-looking, protectionist US is not in the long-term interest of American companies, investors, consumers or workers – nor is a global order in which normative rules are trumped by transactional deals. 

The erosion of the rule of law in the US and arbitrary use of executive power is further weakening the predictability and transparency valued by companies and investors.

Despite this, US multinational corporations and investors are underestimating these challenges and the risks they pose to their interests. Instead of fighting to safeguard the structural bedrock of their success, most are sidestepping their responsibility. Why?

Click here to continue reading the full version of this Expert Comment on the Chatham House website.