The Fantasy of “Uninationals” and the Reality of Why America Needs Multinationals

In reality, we live in a global economy that requires large, integrated firms to advance national success. That means embracing multinationals, not demonizing them.

In 2016, I attended a trade and manufacturing conference in Washington, D.C., organized by anti-globalists and featuring several speakers, among them Bob Lighthizer, who would later serve as U.S. Trade Representative in the first Trump administration. After one panel, I commented that the U.S. government should do more to support American companies being systematically targeted by the Chinese government.

The panelists’ response? “If these multinational traitors want to produce in China, screw ‘em. They deserve everything they get.”

That kind of anti-multinational rhetoric has echoed through policy circles for decades, and it’s still going strong.

More recently, former Senator Marco Rubio (R-FL) declared that multinationals have no loyalty to the United States. And during his 2024 campaign, Donald Trump pledged to "stop U.S. businesses from offshoring jobs" by cutting the corporate tax rate from 21 to 15 percent, but only for companies that produce within the United States.

But it’s not just Trumpians who think this way. Many on the left do too. Back in 2004, John Kerry famously called the CEOs of such companies “Benedict Arnolds” for moving production to China. Since then, progressive pundit Robert Reich has argued that the U.S. government should stop defending multinational interests abroad, including by refusing to push back on China’s theft of their intellectual property.

Critics of American multinationals operating in China often ignore several inconvenient facts:

• U.S. production in China supports high-paying jobs in America, including in R&D, corporate management, and several other areas.

• In many cases, companies were required by the Chinese government to produce locally as a condition of market access.

• Past U.S. administrations, including the second Bush administration, actively encouraged firms to move production to China to ensure U.S. competitiveness. After that, President Obama stated in 2011: “The positive, constructive, cooperative U.S.-China relationship is good for the United States.”

But no, screw the facts! According to these “moral patriots,” no U.S.-headquartered company should produce anything outside the United States. So, the refrain goes: Multinational corporations are traitors that deserve whatever they get.

Really? Then help me get this straight—what exactly do critics expect multinationals to do?

• Expectation: Produce everything domestically at a higher cost.

  • Reality: U.S. consumers have consistently shown that they’re unwilling to support that with their wallets.

• Expectation: Avoid foreign, especially Chinese, market access altogether.

  • Reality: That would only reduce revenues and eliminate jobs at home.

• Expectation: Rely only on the domestic market to fund innovation.

  • Reality: Multinationals reinvest global earnings into U.S.-based innovation, R&D, and capital spending.

• Expectation: Win the global tech race by isolating American companies from the global economy.

  • Reality: Sure, and we’ll win the Olympics by refusing to compete.

Oh, and what about foreign corporations that produce in the United States? Are they Benedict Arnolds to their home countries?

Rather than grapple with the realities of a complex global economy, populists on both sides of the aisle retreat into a fantasy world populated by “uninationals”—companies that are headquartered in the United States, sell only to Americans, buy only from U.S. suppliers, and produce only within U.S. borders.

And in this worldview created by the new right and neo-Brandeisians on the left, ideally those firms would be local, small- and medium-sized enterprises.

For companies that deviate from that fantasy—multinationals—screw ‘em! The solution is clear: hit them with antitrust suits, raise their taxes, and let them fend for themselves when foreign governments attack them, including China.

It’s time to grow up. We live in a global economy, one that requires extremely large, globally integrated firms to advance national success. In reality, that means embracing multinationals, not demonizing them. It also means letting go of emotionally satisfying but economically naïve rants against corporations that have responded rationally to global pressures and incentives.

It’s time to move toward economic pragmatism, which will require two key things:

1. Congress should strengthen incentives to produce in the United States. That includes expanding the R&D tax credit, establishing an investment tax credit, adopting a border-adjustable value-added tax (VAT), and taking steps to reduce the value of the dollar.

2. The U.S. government must proactively defend American multinationals against foreign governments that target them with discriminatory regulations, forced technology transfers, and unfair fines and taxes. ITIF’s Aegis Project has documented many such cases. Yet, the U.S. federal government almost always turns a blind eye, partly to satisfy the State Department’s appetite for diplomatic harmony, and partly because foreign policy goals continue to override techno-economic security concerns.

These foreign attacks don’t just hurt companies. They hurt American workers and the broader economy. When foreign governments condone or enable intellectual property theft, U.S. innovators lose out, and so do the Americans they employ. When foreign nations impose unfair taxes or penalties on U.S. firms, it reduces American tax revenues and harms workers. When foreign governments force U.S. companies to localize data or infrastructure, it hurts American workers and undermines our global competitiveness.

To be clear, this does not mean that all offshoring was wise or beneficial. No think tank has done more than ITIF to highlight the dangers of U.S. deindustrialization. But attacking U.S. multinationals is not the solution, no matter how gratifying it may be to populists on the left and the right.

The idea that the United States can maintain a vibrant, competitive economy without strong multinationals is absurd—almost childlike in its simplicity. Does anyone seriously believe we can have a dynamic aircraft manufacturer that sells and produces only in the United States? Or build a world-leading software, pharmaceutical, or semiconductor company?

If so, they’ve fundamentally misunderstood the basic economics of modern industry. But we shouldn’t be surprised. Few economists in Washington have studied industrial organization or innovation policy. And populists prefer to peddle the comforting fantasy that economies of scale barely matter.

Without strong multinationals, the United States will slip permanently into economic second-class status. And without at least some global sales and production, our multinationals cannot thrive. It’s time for a more assertive foreign trade and domestic industrial strategy—one that defends and strengthens U.S. multinationals as a core pillar of American economic power.