U.S. President Donald Trump chose to visit Gulf countries for his second term’s first trip abroad. The three-country tour secured an estimated total of $1.3 trillion in investment pledges from Saudi Arabia ($600 billion), Qatar ($500 billion) and the United Arab Emirates ($200 billion). His Gulf partners may be pleased to hear that the usual U.S. government review of their investment plans—to check, for instance, that the projects do not pose national security risks—could proceed swiftly, and not just because Trump is not a stickler for procedure. More to the point, Trump’s new America First Investment Policy (AFIP) makes it a priority to attract fresh flows of foreign money to the U.S. economy.
AFIP is only a blueprint so far, sketching out a broad plan for the administration and government agencies to adopt policies that will convince foreign firms to pour money into the United States. Beyond economics, the document makes for a compelling read. AFIP reflects the brave new world the United States has entered under Trump 2.0—a place where signing shiny business deals matters more than anything else and where short-term interests trump long-term considerations.
Tariffs are making the headlines these days, but investments matter far more in the grand scheme of things. Trade is a short-term affair, with flows coming and going depending on a range of volatile considerations like consumer demand, tariff policies, or the geopolitical alignments of the day. Investments—in new factories or high-tech research facilities, for instance—are an entirely different beast. The impact of multibillion-dollar projects can span decades, reshaping local economies and fostering the creation of jobs that will support long-term economic growth.
AFIP makes it clear that Trump has made attracting foreign investors his top priority. The document states that his administration will offer firms from friendly countries a fast-tracked review process for their investment plans, which will come in the form of an expedited approval from the Committee on Foreign Investment in the United States (CFIUS) at the U.S. Treasury. Trump does not go for nuance when spelling out who he thinks America’s best friends are: AFIP mentions that some U.S. partners “have tremendous sovereign wealth funds,” a clear wink at the Gulf countries.
That Trump is keen to attract fresh money to U.S. soil is logical; such efforts are at the top of a U.S. president’s job description. What is more surprising, however, is that the Trump administration is also keen to welcome money from China, as long as it is for passive ownership—meaning that investors do not have a say in day-to-day operations. China is not the only U.S. adversary that Trump wants to attract passive investments from: According to AFIP, the United States could soon welcome deep-pocketed investors from everywhere around the world—including not only China, but also Russia and other U.S. foes. It’s no wonder, then, that Trump has been talking so glowingly about the business deals he wants to strike with the Kremlin lately.
Such a focus on attracting business deals at all costs appears shortsighted. It is hard to imagine that Chinese or Russian firms could make even passive investments in the United States without official approval in Beijing or Moscow. U.S. adversaries could eventually use these assets as leverage against Washington; liquidating investments, even passive ones, puts jobs at risk. Security experts may also have a few things to say about the idea that the Trump administration could soon let Chinese or Russian firms have a presence in critical sectors like infrastructure, health care, or energy—dismantling CFIUS’s previous work to prevent this.
The rest of AFIP suggests that Trump has not become a China dove. According to the blueprint, foreign firms willing to make active investments in the United States might soon need to curb their ties to the United States’ adversaries—mainly China. Such a demand is not surprising: Asking foreign economies to decouple from China is a common thread linking many of Trump’s trade and financial policies. In the investment field, the White House seems to envision a U.S.-led bubble that excludes China. (The Kremlin may want to note that AFIP explicitly lists Russia among the adversaries the United States wants to keep outside the bubble.)
The problem with this strategy is that global investors have little intention to shun China, the global manufacturing hegemon and rising tech power, entirely. Since the release of AFIP, Washington-based lawyers have been hard at work advising foreign investors to set up separate investment arms for their U.S. and China deals. Instead of prompting global investors to reassess their ties to Chinese firms, Washington could be shooting itself in the foot by fueling the development of opaque investment schemes that will prove virtually impossible to monitor. It appears that some of Washington’s best friends in the Gulf are not even willing to pretend that they will reduce their ties to China: Just a couple of days after Trump left Qatar, its sovereign wealth fund confirmed that is “actively looking at investments in China.”
On top of this, it is not clear how the administration could assess “distance and independence” from China—the two criteria foreign investors will need to fulfill to make active investments on U.S. soil. Trump boasts that he will use “objective standards,” which have yet to be defined. Considering the administration’s ongoing assault on the U.S. federal government, with slashed headcounts and budgets at departments and agencies, it’s conceivable that investment approvals could solely depend on Trump’s mood of the day—paving the way for cronyism and favoritism. (Gifting Trump a large plane may help, too).
AFIP’s fine print makes it clear that carefully monitoring investments is no longer the point, anyway. The strategy pencils in that “bureaucratic, complex, and open-ended” mitigation agreements through which foreign investors work with U.S. authorities to assuage national security concerns will come to an end. (In the past, such agreements have required, for example, that only U.S. citizens access sensitive data in high-tech labs.) Instead, investors will simply need to commit to taking a set of limited actions over a short time span—a strategy ill-suited to preserve U.S. interests over the course of decades-long investments.
Still in the same vein, AFIP pledges that environmental reviews for investments worth more than $1 billion could be streamlined. The subtext is obvious: The Trump administration will not even pay lip service to environmental concerns when reviewing investment plans and instead focus merely on financial metrics, business considerations, and sexy media headlines. Considering Trump’s long-held view that climate change is a scam, this may not come as a surprise. But ignoring the potential damage that investment projects can have on air, land, and water looks like a recipe for environmental disaster.
The United States has entered a brave new world, where its president acts as if he were running Trump Enterprises, not the world’s largest economy. Money is welcome from all, even foes. To keep the money flowing, investors can pretend they are decoupling from China when they are merely setting up opaque financial structures to escape U.S. scrutiny. On top of this, U.S. long-term interests do not matter anymore as long as lucrative deals are signed. AFIP is a prime example of a poorly thought-out policy that will eventually undermine the United States’ long-term interests. For Trump, this may not matter—as long as he can make deals, he could not care less.
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