Should Civil Unrest in the United States Dissuade Foreign Investors?
On January 6, 2021, the world watched in shock and horror as the United States Capitol (the building that holds the two chambers of Congress: the House of Representatives and the Senate) was stormed by a group of domestic right-wing extremists. Inside, the Senators and Representatives were certifying the results of the November 2020 presidential election, which meant declaring Joe Biden as the President-elect of the United States (US).
The assailants believe that the election was “stolen,” and that Donald Trump had in fact won. They stormed the Capitol to both protest the outcome and proclaim Trump as the victor. This incident and its aftermath have caused divisions within the Republican Party, pitting loyalists to Trump against those who denounce his role in what transpired. Democrats, meanwhile, have impeached Trump a second time in the House, and are now attempting to convict him in the Senate. In spite of these partisan disagreements, as soon as the Capitol building was secured, Congress reconvened to finish certifying the election results—which showed the world that American democracy had not been defeated. In that moment, a new strength radiated from the United States, as it became clear that the turmoil was only temporary, and our country would overcome it.
In the days following the attack, the Capitol repaired almost all of the damage that had been done, and the building was made ready for Biden’s inauguration. On January 20, 2021, Joe Biden was sworn in as the 46th President of the United States—without any major incidents. The Democratic Party now has control of the House of Representatives, the Senate, and the Presidency, which will (in theory) allow it to govern and pass legislation more efficiently.
In the weeks since the attack, the US stock market has looked quite promising. In fact, the market is now at its highest point since the start of the pandemic. The current state of the market is a reflection of investors’ faith in the stability of the US, seeing as the insurrection ultimately had no impact on the peaceful transition of power. For the market to “crash,” the federal government would actually have to be taken over and destroyed. Just before the attack, the market was on the rise following the results of two run-off elections in Georgia that gave the Democrats control of the Senate. During and after the attack, the market only dropped by a few percent, before later rebounding—which proves that concerns about instability were as fleeting as the attack itself. Stated simply, there is no need for foreign investors to worry about the US economy “collapsing” due to civil unrest.
Promising news coming from the White House includes Biden's plan to administer 100 million COVID-19 vaccines in his first 100 days in office. The pandemic has been an extreme burden on the US economy, causing millions of people to lose their jobs and the stock market to plummet. The Biden team’s efforts to vaccinate so many people in so little time will likely restore a degree of confidence in the US economy, which will in turn cause the stock market to rise. After all, the more people get vaccinated, the more our lives can return to normal, which will enable our country to truly begin to recover from this pandemic. In addition to his ambitious vaccination strategy, Biden is trying to get Congress to pass a $1.9 trillion stimulus package that will, among other things, provide financial aid to American individuals, families, and businesses. If the current version of this bill becomes law, then a vast majority of Americans will receive a $1,400 check. Putting money in the pockets of Americans will help boost consumer spending, thereby pumping much-needed cash back into the US economy.
Given the perseverance shown by our government during the insurrection and the encouraging actions of the Biden administration so far, foreign investors should not be dissuaded from doing business in the United States. As long as there is stability (which there is), the US economy and stock market will not be overly affected by whatever the domestic political situation happens to be. In addition to revitalizing the US State Department, reengaging with America’s traditional allies, recommitting to multilateral organizations and treaties, and rescinding controversial immigration policies from his predecessor, Biden is planning to incentivize international trade via his “foreign policy for the middle class”—which makes now the ideal time for companies like yours to export and expand to the United States.
Caroline Marr is an intern at M74 and a student of Economics, Government, and Politics at the University of Maryland. She is also the Leadership Chair of Alpha Phi Omega, a service fraternity on her campus. Her interests include international relations and the global economy.
The views expressed above are those of the author and do not reflect the official position of the M74 Group, which remains neutral on all matters. Publishers assume no liability for content.