Asian companies to increase US investments amid supply-chain shifts
Investment from South Korea, Taiwan and Japan is expected to rise as global companies realign their supply chains, according to a Citi executive.
Ernesto Torres Cantu, Citi's head of international business outside North America, told Reuters that companies from Japan, South Korea and Taiwan are expected to increase their investments in the United States. Speaking in Hong Kong, Cantu noted that inbound business into North America is seeing double-digit growth as global firms expand their US presence.
Cantu said that these investments usually progress in stages, starting with land acquisition and factory construction before moving to manufacturing and daily operations. This gradual expansion is expected to maintain investment flows over a long period.
The Economic Times reported that Citi and JPMorgan are financing Japanese projects related to a $550 billion investment commitment from Tokyo to the US. Additionally, the White House recently announced the first phase of a $350 billion strategic investment package from South Korea.
Cantu suggested that while tariffs are a factor, the Gulf War could be having a more significant impact on corporate decisions, leading companies to restructure supply chains and reassess trade routes. He added that large multinational companies have shown resilience during geopolitical disruptions.
The executive also expects cross-border business involving Asian economies to grow, with India and China emerging as major centres. He noted that the European Union's free trade agreement with India is scheduled to take effect in 2027, which is expected to create business opportunities.
