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Illustration: Lazaro Gamio/Axios

President Trump's broad attack on trading partners appears to be spooking investors overseas, whose net direct investment in the U.S. has fallen substantially since his election in 2016, says a leading economist.

Why it matters: Adam Posen, president of the Peterson Institute for International Economics, calls this evidence of the start of the "post-American world economy," in which the U.S. becomes excluded by a large amount of foreign trade. He wrote on the thesis Monday in Foreign Affairs.

What's going on: Posen tells Axios that, despite last year's big Republican tax cut, net foreign direct investment fell to $51.3 billion in the first quarter.

  • That's down 37% from the same quarter in 2017, and 65% from 2016, as measured by the U.S. Bureau of Economic Analysis.
  • It's done so every quarter since the fourth quarter of 2016, when Trump won election.
  • "Basically, net FDI has been falling off a cliff," Posen said.

As an example, Chinese commercial real estate investors have retreated from the U.S. market, selling $1.29 billion in properties in the second quarter while buying only $126 million, the first quarter they have been net sellers since 2008, the WSJ's Esther Fung reported today.

  • Sentiment surveys suggest that U.S. businesses are bullish about the domestic market, reports the NYT's Patricia Cohen. But Posen said that reflects short-term confidence. FDI numbers, conversely, reflect long-term investment decisions made once a decade, he said.
  • FDI leads to high-skilled jobs, R&D at home, and then more investment.
  • "Maybe it will come back, but I think this is a leading indicator. It's a bad warning of what's going on," he said.

Go deeper

Scoop: Former OMB director to set up Pro-Trump think tanks

OMB Director Russ Vought parfticipates in a photo-op for the printing of President Donald Trumps budget for Fiscal Year 2020 at the Government Publishing Office in Washington on Thursday, March 7, 2019. (Photo By Bill Clark/CQ Roll Call)

Russ Vought, who led Donald Trump's Office of Management and Budget, plans to announce two pro-Trump organizations Tuesday, aiming to provide the ideological ammunition to sustain Trump's political movement after his departure from the White House.

Why it matters: The Center for American Restoration and an advocacy arm, America Restoration Action, will try to keep cultural issues that animated Trump’s presidency on the public agenda, according to people familiar with the matter.

Janet Yellen confirmed as Treasury secretary

Janet Yellen. Photo: Alex Wong/Getty Images

The Senate voted 84-15 to confirm Janet Yellen as Treasury secretary on Monday.

Why it matters: Yellen is the first woman to serve as Treasury secretary, a Cabinet position that will be crucial in helping steer the country out of the pandemic-induced economic crisis.

Dan Primack, author of Pro Rata
4 hours ago - Economy & Business

Scoop: Red Sox strike out on deal to go public

Illustration: Sarah Grillo/Axios

The parent company of the Boston Red Sox and Liverpool F.C. has ended talks to sell a minority ownership stake to RedBall Acquisition, a SPAC formed by longtime baseball executive Billy Beane and investor Gerry Cardinale, Axios has learned from multiple sources. An alternative investment, structured more like private equity, remains possible.

Why it matters: Red Sox fans won't be able to buy stock in the team any time soon.

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