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ECONOMY

Japanese firms keen to invest in “red states” in U.S.

Nikkei published a prominent inside-page article on a steep increase in Japanese corporate investment in the United States following the inauguration of the Trump administration two years ago, asserting that many of the direct investments appear to be concentrated in so-called “red states” where President Trump enjoys relatively high support from local voters. According to data compiled by JETRO, some 70% of the so-called “greenfield investments,” in which a parent firm constructs a subsidiary company in a foreign country, by Japanese companies have been made in red states, such as Wisconsin, Pennsylvania, and Texas. As the U.S. leader apparently attaches high importance to reconstructing the economies of these areas in his bid for reelection in 2020, the daily suspected that when opening new factories in North America, corporate Japan is mindful of the President’s narrative that America’s industrial base and jobs have been lost as a result of the ballooning U.S. trade deficit.

 

The daily noted that Prime Minister Abe is anxious to highlight Japanese corporate investment in America in view of the U.S. leader’s persistent criticism of Japan’s trade surplus, speculating that President Trump’s assertion on March 6 that Japanese companies are planning to build at least seven major production plants in the U.S. was apparently based on a briefing by the premier during earlier summit talks. The paper expressed hope that active corporate investment by Japanese businesses may help deflect U.S. trade pressure in the upcoming bilateral trade talks. 

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