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Foreign Investment in the U.S. to Surge?

We’ve previously highlighted the onshoring process that’s well underway: U.S. companies moving their manufacturing back stateside as the relative competitiveness of American workers increases. But it’s not just U.S. companies. Foreign companies are also expanding their business in the U.S., with foreign investment set to surge, according to a new Kiplinger Letter report mentioned in Businessweek.

China’s Golden Dragon Precise Copper Tube Group, for example, is building a $100 million manufacturing facility in “sweet home” Alabama—one of the states we’ve identified as a U.S. manufacturing magnet. Egypt’s Orascom Construction Industries announced this month that it would build a $1.4 billion fertilizer plant in Iowa.

Besides gaining access to the enormous American market, there is another reason for all this investment in the U.S.: China is becoming more expensive, and U.S. workers are more productive at lower cost than in Europe or Japan. The U.S. is increasingly used as a base to re-export “foreign” brands as well: BMWs made in South Carolina are sold around the world, and Honda is getting ready to export hundreds of thousands more cars of the 1.2 million produced annually in the U.S.

Of all the major economies in the world, the U.S. is doing the least poorly. Europe faces a colossal self-created currency disaster, Russia sees its energy-profits wither as the U.S. energy revolution unfolds, Brazil is still the perpetual country of the future, and both China and Japan have massive problems lurking beneath the surface as a trade war looms. For now, the U.S. will remain a relative beacon of stability and profit—and foreign investors recognize this.

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