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For decades, multinational corporations operated under the belief that they could transcend national borders, access free markets, and serve a global customer base while remaining detached from geopolitical tensions. President Donald Trump’s return to the White House has shattered that notion.
The foundational assumptions of corporate strategy — market access driven by consumer demand and regulatory compliance—are giving way to a world where political allegiance and “home country” dynamics determine success.
This shift isn’t solely driven by Trump’s policies. Though his America First economic policy — marked by tariff threats, economic coercion, and protectionist measures — has thrust U.S. companies into the heart of rising global tensions, with various responses from the international community: heightened regulatory scrutiny, consumer boycotts, and reputational risks for American brands.
It’s not just boycotts, but the patriotic calls to support local industries. Take the recent success of Chinese animated film “Ne Zha,” the highest-grossing film in Chinese history and the first non-Hollywood film to cross $1 billion in Chinese box office receipts.
China’s state-directed economic strategy further politicizes markets by fueling nationalist consumerism worldwide. Western businesses, particularly American ones, now face a landscape where trade, investment, and corporate presence are no longer purely economic matters but increasingly tied to geopolitics.
Trump’s renewed commitment to America First has led to sweeping tariff threats, including potential 60% duties on Chinese products. These measures strain relations not just with China but also with key allies like Canada, Mexico, and the European Union. U.S. corporations are now viewed abroad as extensions of American foreign policy, exposing them to backlash.
The consequences are clear. In China, boycotts of American products are on the rise. Apple, once dominant in the Chinese smartphone market, saw its share drop to 15% in Q3 2024 as Huawei claimed 19%, according to Counterpoint Research. In its most recent earnings, Apple’s China sales declined 11.1%, its largest drop in China sales since the same quarter last year. Starbucks faces similar challenges, losing ground to homegrown competitor Luckin Coffee, which offers lower prices, faster service, and localized flavors. Tesla — once China’s leading foreign EV brand — has seen a 22% year-over-year decline in sales, with BYD dominating the domestic market.
Nationalist sentiment, amplified by state media, has left U.S. firms vulnerable — a trend Trump’s policies will only intensify. While many companies will strive to maintain a presence in China, the balance has shifted decisively toward domestic brands.
A global patriotic dividend
Economic nationalism extends beyond China. Countries targeted by Trump’s tariffs — including Canada, Mexico, and several EU nations — are witnessing a patriotic dividend favoring domestic brands. In Mexico, American fast-food chains like McDonald’s and Domino’s face declining sales as campaigns promote local alternatives such as Vips and El Farolito. In Europe, backlash against U.S. companies is driven by both trade disputes and digital sovereignty ambitions. French retailers now prioritize domestic brands in response to renewed U.S. tariffs on European steel and aluminum.
Germany offers a striking example. Elon Musk’s perceived alignment with the far-right Alternative für Deutschland (AfD) party has sparked protests and boycotts, leading to a nearly 60% drop in Tesla’s German sales since early 2024. Sales for Tesla so far in 2025 are down 45% year over year.
Regulatory authorities are now reviewing Tesla’s Berlin gigafactory’s operations. This underscores how U.S. companies are no longer seen as neutral players; executives’ political affiliations and home-country policies now shape their competitive standing abroad.
Tesla’s stock market performance over the past six months.
Economic nationalism is now a global phenomenon. The weaponization of trade and investment affects multinationals worldwide. In the Middle East and Africa, U.S. firms face growing scrutiny as regional governments diversify economic partnerships away from Washington. China’s Belt and Road Initiative and expanding BRICS trade ties — now accounting for over 30% of global GDP — have further eroded U.S. corporate dominance in emerging markets. That’s one reason the Trump administration targeted the Panama Canal as one of its first global policy issues.
In Southeast Asia, once a stronghold for U.S. brands, countries like Indonesia and Malaysia increasingly favor Chinese and domestic firms. Indonesia’s 2024 digital sovereignty law, for instance, mandates that foreign tech companies store user data locally — a move that disproportionately impacts U.S. giants like Google and Meta.
Tesla: A case study in the end of the global free market
Tesla exemplifies the challenges facing multinationals in this new era. The company’s plans to secure Chinese regulatory approval for its autonomous driving technology have stalled amid escalating U.S.-China trade tensions. Chinese authorities now view Tesla’s license as leverage in negotiations with the Trump administration.
Musk himself highlighted the dilemma: China won’t allow Tesla to transfer training data abroad, while the U.S. prohibits processing within China. This regulatory deadlock threatens Tesla’s Full Self-Driving (FSD) rollout in China, tying its business success directly to broader trade negotiations.
Tesla’s reliance on China — once its most lucrative foreign market — has become a liability. The company’s Shanghai gigafactory fueled expansion but also strengthened Chinese EV competitors. BYD now controls 35% of China’s EV market, compared to Tesla’s 7%. Compounding Tesla’s challenges, Musk’s perceived political leanings risk alienating consumers both abroad and in the U.S.
The world is no longer a singular, interconnected market but a fragmented landscape shaped by economic blocs and national identities. The era when corporations could operate above the geopolitical fray is over. Businesses face hard choices. Do they align with Washington’s push for economic decoupling from China, risking access to one of the world’s largest consumer markets? Can they navigate Europe’s tightening regulatory regime aimed at curbing U.S. tech dominance? How do they manage Middle Eastern geopolitical shifts while maintaining favorable ties with Washington? How do they balance allegiance to Trump’s America First agenda without becoming perceived as foreign policy tools?
The idea of a global company was built on the premise of open markets and politics taking a backseat to economic growth. That basic premise has collapsed. In the new Trump era, companies that fail to adapt to the new politically charged normal will face backlash and isolation, shrinking market access, and waning consumer acceptance and relevance.
U.S. firms must not only acknowledge this shift but develop strategies that safeguard both economic prosperity and national security — before China’s more coordinated approach and the global rise of ‘Anything But American’ consumerism further erode their competitive edge.
—By Dewardric McNeal, managing director and senior policy analyst at Longview Global, and a CNBC Contributor
