By
Joseph QuinlanMay 20, 2022 3:00 am ET
Nothing is more fashionable these days than writing the obituary for globalization. The ensuing tragedy would leave lasting scars on the U.S. But missing from the debate about deglobalization is this: If the world of unfettered, cross-border flows of goods, services, people, capital, and data is really a thing of the past, then one of U.S. businesses’ biggest bets of the postwar era is about to go bust.
No entity in the world has wagered more resources on globalization over the past four decades than U.S. multinationals. America’s stock of outward foreign direct investment rose from $215 billion in 1980 to $8.1 trillion in 2020, according to figures from the United Nations. The Netherlands, with some $3.8 trillion in FDI stock in 2020, was a distant second, underscoring the fact that no one has a larger global footprint than U.S. firms.
Going global became the mantra of many U.S. companies as the world of the late 20th century was unlocked by falling trade barriers, investment reforms, industry liberalization, falling communications and transportation costs, and the proliferation of regional trading blocs. These structural dynamics were complemented by seminal, one-off events such as the opening of China, economic reforms in India, the enlargement of the European Union, and the collapse of communism.