NEWS WRAP

The race for vaccination

• VA-Vaccinated | The Department of Veterans Affairs became the first US federal department to mandate COVID-19 vaccinations for its employees. New York City followed suit with a requirement for municipal employees to be vaccinated, and Californian state employees and health care workers now must either be vaccinated or face weekly testing. Amid the continued spread of the Delta, only 49 per cent of Americans are fully vaccinated. READ MORE HERE
   

• Vale Bob Moses | Civil rights leader Robert "Bob" Moses, best known for his organisation of the 1964 Mississippi Freedom Summer Project, passed away on Sunday. Renowned for his soft-spoken nature, and emphasis on non-violence, education and voter registration, his death comes amid an emboldened push by progressive Democrats to pass federal legislation to strengthen voter rights. READ MORE HERE
   

• Power move Pelosi | Rep. Adam Kinzinger of Illinois and Rep. Liz Cheney of Wyoming harshly criticised their Republican colleagues on the first day of public hearings of the Jan 6 Select Committee. Speaker Nancy Pelosi controversially selected all nine members of the committee, including Kinzinger and Cheney as the sole Republicans, stoking embarrassment among Republicans who rejected the House’s proposal for a bipartisan investigation into the insurrection in February. READ MORE HERE
   

• Surfside at rest | The final victim of the Surfside Florida Condo collapse was identified, bringing the death toll of the disaster to 98 and a close to the disaster recovery effort. While the search and rescue operations officially concluded on 7 July, crews continued their search operation to bring closure to families in what is now officially one of the largest emergency efforts ever conducted in Florida. READ MORE HERE

ANALYSIS

Australia underperforms in attracting US investment in 2020

Stephen Kirchner 
Director, Trade and Investment 

The US Bureau of Economic Analysis (BEA) last week released its 2020 data on the US direct investment position abroad on the part of its multinational enterprises. This allows us to update the analysis of US investment in Australia contained in my report, Australia-US bilateral investment in 2020: Taxing times.

As noted in my report, US direct investment in Australia peaked in 2014 at US$177.4 billion. Since 2017, when President Trump’s Tax Reform and Jobs Act lowered the US corporate tax rate from 35 per cent to 21 per cent, US direct investment in Australia has fallen by nearly 4 per cent to US$163.5 billion in 2020.

The BEA data also allows us to calculate the return on US investment in Australia by dividing direct investment income without current cost adjustment by the direct investment position on a historical cost basis. US direct investment in Australia returned 4.5 per cent in 2020, down from 5.6 per cent in 2019 and compared to an average of 7 per cent since 1999. These lower returns on US investment in Australia are also likely a factor behind the cooling interest on the part of US firms.

The Biden administration has proposed a number of changes to the US corporate tax system, which would raise the tax burden on US corporations both at home and abroad. This includes an increase in the US corporate income tax rate from 21 per cent to 28 per cent, although state taxes will increase the combined state and federal top rate to above 30 per cent. The increase in the US corporate tax rate, if passed by Congress, will make Australia a more attractive destination for US investors on a relative basis. However, it is also likely to reduce investment by US firms and may see a significant restructuring of the operations and ownership of US multinational enterprises. The net effect on US investment abroad, and US investment in Australia in particular, is ambiguous. However, there is always opportunity for Australia to implement tax and other policy changes that are more friendly to foreign investors, including those from the United States.

BY THE NUMBERS

Australia outperforms the US at Tokyo

Sarah Hamilton
Research Associate for Data Insights

While the United States consistently tops the medal tally at the Summer Olympic Games, per population Australia outperforms the United States. Altogether, Australia has won 512 Olympic medals, equal to 20 medals per million. The United States has won 2828 medals, equivalent to just under 9 medals per million people.

Swimming unsurprisingly is Australia's best sport at the Olympic games, having won a total of 192 medals in the pool. The United States has won their most medals in Athletics with 802 medals all up, followed by swimming with 553. 

VIDEO

Wendy Sherman on US foreign policy

Deputy Secretary of State Wendy Sherman visited China this week for “frank and open” talks with Chinese Foreign Minister Wang Yi. The talks were reportedly frosty, with officials sparring over both nations' human rights records and coercive economic tactics, and Vice-Foreign Minister Xie Feng urging the United States to stop "demonising" China and holding China as an "imagined enemy".

The Deputy Secretary is no stranger to tough diplomatic talks, being lead negotiator of the JCOPA negotiation (or Iran nuclear deal). This week were reminded of our discussion with Ms Sherman as part of our 2020 Election Watch web series in October last year.

Discussing US foreign policy with China, Sherman said: "I think... that the fullness of our democracy, of our values, of our shared values with Australia can be predominate once again in how we fashion the world. That doesn't mean we have to disrespect China in how they manage their own people, but it does mean we have to speak up about human rights..." | Watch the full video here.

Catch this and other recent webinars on the USSC YouTube channel!

THE WEEK IN TWEETS

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