President Donald Trump threw down the gauntlet at Davos that everyone thought he would, imploring globalist CEOs to invest in a United States that is “open for business” and where Republicans just slashed corporate tax rates.
Not surprisingly, some international CEOs already have turned a welcoming ear to Trump’s approach, and their message is that American policy friendliness to foreign investment means the U.S. will get even more of their resources in new factories, offices and jobs.
“Now is the best time to bring your money, your jobs, your businesses to America,” Trump said on Friday at the confab of globalists, singling out the tax cuts and how he’s curbed regulations as boosting the investment climate. “The world is witnessing the resurgence of a strong and prosperous America.”
And while most Davos attendees were understood to be ideologically opposed to Trump’s “America First” philosophy, especially when it comes to trade policy, CEOs of European and Asian companies aren’t letting that get in the way of looking for greater participation not only in an increasingly business-friendly United States but also in an economy that looks to be growing.
“The tax changes probably are going to accelerate our investment here in the States.”
His Swiss bosses “consider America our first growth market, with China,” Roger Varin, CEO of Staubli North America, the Duncan, S.C.-based U.S. arm of the Switzerland-based robotics manufacturer, told Chief Executive. Thus Staubli already committed to boosting the footprint of its 100,000-square-foot plant in Duncan, where it employs about 160 people, by about 25 percent and hiring more people correspondingly.
“The tax changes probably are going to accelerate our investment here in the States,” Varin said.
Such sentiments are just part of a surge in optimism globally by CEOs who recognize the role that Trump and his policies have played, according to Sir Martin Sorrell, CEO of ad group WPP, before Trump’s speech, amid speculation about what the American president would say.
“There is extreme optimism” globally, he told the Wall Street Journal. “It is remarkable the psychological difference – what ever you think of Trump – that he has brought … It has improved [CEOs’] already very positive psychology.”
Trump’s cut in the standard U.S. corporate tax rate to 21 percent from 35 percent “opens the floodgate” to additional investments by foreign companies in America, Rick Schreiber, national practice leader for manufacturing and distribution for BDO, and a director of the National Association of Manufacturers, told Chief Executive.
“We used to be ‘top dog’ on taxes – and not in a good way. Now we’re probably average or slightly below average” compared with European countries’ tax rates. With other dynamics in the U.S. already favorable to foreign investment, he said, the tax cut helps tip the scale America’s way.”