As President Trump endeavors to protect the American economy, one area in need of better focus is to do more to protect American companies abroad. With tariff policies creating hostility from the many nations losing business in the United States, the administration must set up defensive polices to protect our own on foreign territory.
An area where American companies have a need is for the federal government to protect American companies from being pushed out in favor of Chinese competitors. America continues to be the biggest economy in the world, and we continue to hold the upper hand in negotiations on international trade, and we need to continue to act like it when it comes to protecting our own.
Although our nation has a manufacturing trade deficit, we have a trade surplus when it comes to the services industry. The Wall Street Journal reported last month, “while the U.S. buys more goods from abroad than it sells, the opposite is true for services, which include everything from streaming subscriptions to financial advice.” Our trade surplus has gone from $77 billion in 2000 to almost $300 billion last year. Some of America’s most successful companies occupy this space like Microsoft, JP Morgan Chase and Google. A grave concern is that a trade war will push foreign governments to tax, fine or ban U.S. companies from operating these services abroad.
Perhaps the most serious area where American companies need protection is in the oil space. Companies like Exxon Mobil, Conoco Phillips and Chevron have significant operations abroad that include exploration, extraction and production. A controversy swelling now involves an American company in Venezuela, Chevron, in need of a license by May 27, 2025, to continue vital operations there. The Trump Administration is currently considering whether to extend that license, and they absolutely should.
Unfortunately, the Chevron controversy is tied up in the issue of Venezuelan strongman Nicolas Maduro’s willingness to accept deported members of criminal gangs and reforms of the nation’s election rules. Reuters reported, “U.S. President Donald Trump on Wednesday said he was reversing a license given to Chevron to operate in Venezuela by his predecessor Joe Biden more than two years ago, accusing President Nicolas Maduro of not making progress on electoral reforms and migrant returns.” The Trump Administration walked back the revocation of the licence, and it was reported in early May that the Administration “floated the idea of increasing pressure on Maduro by tariffing Venezuela instead of revoking leases for what are U.S. oil firms.” Though I’m not wild about tariffs on friends, slapping tariffs on the likes of Maduro to effect change is fine by me and seems far better than punishing a U.S. company that is providing oil for American citizens—oil which, by the way and contrary to recent conventional wisdom would have us believe—we are going to continue to need in vast amounts for a very, very long time.
A stepped-up America First policy of protecting American companies abroad is a good policy. Helping to keep the U.S. economy strong while dealing with the uncertainty created by newly imposed worldwide tariffs is of utmost urgency, particularly when it comes to oil. Our nation needs oil to fuel the economy, and we import about half of the oil we need today. Cutting off American access to a major oil channel would lead to higher gas prices and would impact consumers whom, for example, are getting ready for summer travel.
Returning a moment to China, it is important to make sure that American policy does not have the unintended consequence of strengthening their hand. The goal of Trump’s new trade policies is to onshore more domestic manufacturing away from China and to make sure that China does not continue the goal of expanding influence using their “Belt and Road Initiative” where China is investing heavily in East Asia, Europe and Latin America to push out American economic and military influence.
If American companies are pushed out of foreign nations, China will of course immediately fill the void. The CEO of Chevron, Mike Wirth pointed out, “we’ve seen this playbook before in Africa, in Latin America, in Central Asia and China has created a stronger presence, stronger influence, and control over economies and governments around the world through using their economic assets and position to do so.” The Trump Administration should keep this in mind when considering policies to keep American companies in place abroad.
As the President adopts a tough stance to leverage American influence to force foreign nations to act fairly about trade and immigration policy, protecting American companies that have facilities in foreign nations should be part of a comprehensive trade policy—particularly when it comes to oil. It could be nothing short of catastrophic for the President to lose sight of that.