Insights

Lessons in Navigating U.S. Economic Rapids

On the right, the Republicans are split into two camps. The first is a combination of economic nationalists and those who oppose Chinese foreign and military policy. They wrap their opposition to foreign firms in national security terms. The other group is made up of those with more of a global economic, pro-China view.

Although the Bush administration has supported multilateral mergers and spoken out against protectionism, the split in his party has limited the president's ability to speak out effectively.

In fact, the views of the left and the Republican economic nationalists are remarkably similar, further complicating the situation. For example, two of the harshest critics of the Dubai World Ports deal were former Democratic presidential candidate Senator John Kerry on the left and highly popular conservative radio talk show host Rush Limbaugh on the right.

Moreover, this situation will not go away soon. Congress is set to act to make things tougher for foreign-owned firms. Senator Richard Shelby unanimously moved legislation through a key committee that would tighten reviews of foreign investment and increase the role of Congress in approving these deals. Senator Charles Schumer has introduced legislation that slaps a 27.5 per cent duty on imported Chinese goods until the president certifies China is no longer manipulating its exchange rate.

In short, it is a daunting climate for foreign firms. But all is not lost.

As foreign firms attempt to make inroads into the US market, there are four steps that firms can take to lessen the impact of the current economic environment.

• Demonstrate that you are a global company, not a foreign one. Be able to point out the amount of US jobs created, sales made and taxes paid. As an example, the fact that Lenovo employs several hundred people in the United States and assembles its products in North Carolina and Mexico makes it a truly global company with an important US connection. It is these types of stories that companies need to tell when entering the US market.
• Manage your political risks. Obtain the most up-to-date information on the political landscape in Washington. Develop a proactive strategy to leverage your US presence by building ties with key decision-makers. The best way to generate success is to establish a presence and strategy before a crisis, rather than reacting to one.