“For American businesses, [Trump's tariff threats] introduce significant uncertainty: it is hard to make investment decisions in the face of continual threats of new tariffs, even if many of them may not ultimately be enacted.”
"What I suspect matters most for firms considering investing in Mexico is stable, predictable, comprehensive access to the North American market, more so than the right to bring [investor-state dispute settlement] cases."
When you look at the Trump trade policy, there’s a clear pattern that we’ve seen, which is very aggressive, very dramatic rhetoric in the announcement, and then when it comes time to actually implement the policy, it’s much more toned down and much more in line with historical U.S. trade enforcement policy.
If we think back to original ISDS, the kinds of disputes they often had was a nationalist government coming in and saying, "Foreign investors, we are taking over this mine, you know, it is ours. We’re kicking you out of the country. We might be throwing you in jail.”
The pace of economic globalization may slow, but this isn’t necessarily cause for great concern; the “bicycle theory” that globalization must continually be marching forward lest it come to a crashing halt is a cute metaphor, but there is little empirical evidence to suggest it’s true
There is quite clearly something specific about Chinese FDI that is viewed as much more of a threat than other countries. Everyone kind of acknowledges that in the background, but is not willing to have a clear policy that says yes, this is aimed specifically at China.
On the one hand the U.S. wants to be defending U.S. companies overseas and they are going to see this as vindictive, particularly in going after Apple’s profits retroactively. But in the bigger picture the U.S. is taking moves to fight inversions and improve the global system.