Foreign investment in US drops 32 percent in 2017

Foreign direct investment in the United States dropped 32 percent, or $120 billion, in 2017 as compared to the year before, according to new figures.

After a two-year spike in foreign investment, the Bureau of Economic Analysis found that the rate last year dropped to levels similar to 2014 and the years before the financial crisis.

The largest investments in the U.S. came from a handful of countries, with its northern neighbor Canada topping the list at $66.2 billion of investment, followed by the United Kingdom, Japan and France.

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Europe as a whole accounted for 40 percent of new foreign investment in the U.S., according to the BEA.

The figures come amid increasing trade tensions between the U.S. and several top economic allies.

President Trump imposed tariffs on steel and aluminum on close trading partners including the EU, Canada and Mexico this year, as well as a slew of other tariffs aimed at China, eliciting a barrage of countertariffs. 

The increased trade barriers could affect investment decisions, as foreign companies decide whether or not they want to invest in U.S. operations given the new tariffs.

As in previous years, the vast majority of foreign investment came from the acquisition of U.S. businesses, which accounted for 97.5 percent of all new foreign investment in 2017.

Only $6.4 billion of the overall investment was aimed at establishing new U.S. businesses or expanding foreign-owned U.S. business.