The past 12 months of foreign direct investment (FDI) have been marked by battles over the green transition, hard-fought elections, geopolitical rifts and some spectacular corporate failures. Along the way, fDi’s op-eds have provided the sharp commentary needed to make sense of the investment world’s biggest news events of the year. 

In Europe, 2024 began with pushback on multiple fronts against the EU’s steadfast sustainability agenda. Starting in January, tens of thousands of tractors blocked major highways and cities as farmers protested environmental regulations they claimed would “spell an end to farming as they know it”. The following month, 74 corporate leaders signed the Antwerp Declaration, urging the European Commission to complement its green deal with an industrial deal to tackle the continent’s “slow decline” into deindustrialisation. 

Meanwhile, across the Atlantic, major foreign investment deals faced stumbling blocks. In March, US president Joe Biden took the unprecedented step of publicly opposing Nippon Steel’s $14bn takeover of US Steel on national security grounds — a deal that still hangs in the balance today — sending “a strong signal to international investors that the US may no longer accept market-driven outcomes”.

Controversy did not spare domestic investors. In February, Elon Musk moved SpaceX’s incorporation to Texas in retaliation, after a Delaware judge rejected his $65bn Tesla pay package — a move others firms were advised against, given Texas is “a blank slate when it comes to corporate law”. 

Beijing’s green supremacy

Government intervention to bolster investment and localise critical industries was centre-stage throughout 2024. The US’s imposition of 100% tariffs on Chinese electric vehicles (EVs) in May represents a “pointless struggle” which “won’t affect the trajectory of America’s auto industry”, given Chinese EV imports are negligible. That said, Turkey’s 40% tariff hike on the same imports was quickly followed by BYD pledging to build a $1bn EV factory in the country. It shows that in the right situation, “tariffs may well become another measure of investment promotion”. 

Indeed, industrial policies against China epitomise the creeping return of the interventionist state, marking the end of an era where “power emphatically resided with the corporate sector”. Subsidies and tariffs get the most attention, but state financing of corporates’ strategic investment projects abroad is also growing, and “may be viewed much more negatively in the years ahead”.

Europe’s industrial strategy to build a homegrown EV industry has been called into question by the bankruptcy of its battery darling Northvolt in November. Policymakers must learn from the fact the start-up’s problems were largely down to its inability to “match Chinese competitors on quality, cost or speed to market”. Given EVs are just one of many green industries where China is the undisputed leader, “the time is now … for other countries to engage with the Asian superpower on technology development”.  

Political wins and turmoil

Engagement with China by the US in particular will be closely watched over the coming years, following Donald Trump’s election in November. It’s “doubtful” Beijing will take Trump’s tariff threats “lying down”, placing an even bigger premium on his penchant for his off-the-cuff policymaking.  

Of course, the US wasn’t the only country with an election this year. More than half the world’s population went to the polls in 2024, including India where Narendra Modi won a third term in office. However, he had to form a coalition to do so, calling into question his ability to deliver his ambitious policies based on “infrastructure, investment, innovation and inclusiveness”. Following Nayib Bukele’s re-election as president of El Salvador in June, investors were quickly warned to not be “fooled by [his] popularity [and] rhetoric on social media” or promises to turn the central American country’s improved security situation into economic growth.

In the UK, the Labour party’s return to office after 14 years in opposition sparked hopes for a greater focus on devolution, local government funding and “encouraging local leaders and metro mayors to be nimble, risk-taking and entrepreneurial policy innovators.”

But elections weren’t the only political events impacting investors. In response to the war in Gaza, Houthi rebels disrupted supply chains by attacking cargo ships passing through the Red Sea — an act of desperation given “shooting at a commercial cargo ship is like shooting at the world”. Meanwhile a coup in Bangladesh that ousted prime minister Sheikh Hasina sparked warnings for its new government to learn from the “Arab Spring’s failure to deliver prosperity” by maintaining economic stability and responsible fiscal policy.

And for companies looking to invest in a world free of politics? They should look to outer space, which is tipped to become a $1bn-2bn manufacturing market annually by 2035. Testament to today’s FDI environment, it won’t be completely free of geopolitics, but it might be the closest place they can dream of.

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