Big Deals: Trends in Commercial Diplomacy

https://www.thepresidency.org/the-dispatch/june-20-2025#Trends-In-Commercial-Diplomacy

Major government procurement tenders, such as power stations, airports, civilian aircraft, and telecommunications infrastructure, are the big prizes in overseas markets. U.S. companies can compete and win when there is a level playing field, i.e., where bidding processes are fair and transparent, regulations are predictable, and when countries uphold the principal of “national treatment,” meaning that foreign competitors do not face discrimination. But often, some of these elements are missing. U.S. and (European) companies may also find themselves competing in third country markets against a Chinese state-backed company seeking market share rather than profits, which results in losing a bid to the lower-cost Chinese competitor. These are some of the reasons why there is a need for smart commercial diplomacy, sometimes known as commercial statecraft. 

The Championing American Business Through Diplomacy Act of 2019 encourages an expanded whole-of-government effort – led by State Department’s Bureau of Economic and Business Affairs and the Department Commerce’s International Trade Administration (ITA) - to promote U.S. business interests abroad. It codifies the use of embassy “Deal Teams” and Deal Trackers, which are interagency mechanisms designed to capitalize on major foreign procurement offerings and part of a suite of services embassies provide to American businesses. These include Country Commercial Guides that help U.S. companies navigate foreign markets and “direct line” calls where the ambassador briefs U.S. industry on a particular topic of interest. The Department of Commerce/ITA runs an Advocacy Center to help companies win foreign government procurement contracts. ITA also hosts industry networking events and offers fee-based trade missions and customized export and foreign market counseling through its domestic and overseas offices. (The Department of Defense has its own military sales program to promote U.S. defense hardware.) Unfortunately, U.S. companies are often unaware that embassies offer these programs and services. In 2020, the General Accounting Office counted 759 Foreign Service Officers with economic and commercial responsibilities serving 163 countries. They have extensive knowledge, insights, and contacts that can create pathways to private business opportunities. Washington must empower these FSOs so they may devote time to business outreach and provide them with mandatory pre-deployment training in commercial tradecraft. The effectiveness of the Department of State’s commercial diplomacy also depends on having a confirmed nominee in the positions of Undersecretary and Assistant Secretary for Economic and Business Affairs. 

Observers expect the U.S. Development Finance Corporation (DFC) – which also lacks a Senate-confirmed CEO - to play a more prominent role in the Trump Administration’s strategy to “advance American commercial leadership.” Created to help U.S. companies compete with Chinese companies for overseas infrastructure projects, DFC can now invest with equity in foreign projects that support U.S. exports and domestic projects that attract foreign direct investment. Its priority sectors include critical minerals supply chains, energy, and communications infrastructure. During the confirmation hearing for the DFC’s CEO-nominee, Senator Jeanne Shaheen (D-NH) warned: “Until recently the U.S. Agency for International Development and the Millennium Challenge Corporation were laying the groundwork for private investment by building roads, installing electricity, delivering fresh water. And without these development projects, it will be harder for the DFC to attract the private investments necessary to counter China’s Belt and Road Initiative.” She could have added that USAID ran programs that fostered business-friendly environments overseas, which benefited American companies. 

The Export-Import Bank offers export insurance and direct loans to foreign buyers of U.S. goods. Ex-Im Bank has some new authorities, and we can expect it to provide more financing for overseas projects that support U.S. supply chain security, particularly in critical minerals. For example, Reuters recently reported that Ex-Im is considering a $120 million loan to U.S.-based Critical Minerals Corp for a rare earths mining project in Greenland. The agency’s authorization will need to be renewed in 2026. 

In May 2025, President Trump invited the CEOs of Boeing, Google, Nvidia, Blackrock, and three dozen other companies to join him for meetings with government leaders in Saudi Arabia and the Gulf States. Whereas France, Germany, and China regularly bring business delegations on head of state visits overseas to promote their respective “national champions” and Presidents Obama and Biden did the same, President Trump’s scrum of CEOs stood out in terms of the roster and the White House’s claim that the visit had produced $2 trillion in deals. The Washington Post reported that several of the “new” business deals were actually agreed to prior to 2025. The White House announced a new $4 billion investment by an Abu Dhabi-based company in an aluminum smelter in Oklahoma, though the parties only signed a non-binding memorandum for future discussions. The takeaway here is that presidential business delegations do not always deliver what they may appear to.  

In summary, there is an important role for commercial diplomacy and changes are afoot. These include an emphasis on government support for outbound investment where it strengthens U.S. supply chains and leads to more exports; investment (sometimes with equity) taking the place of development assistance; and a president playing the role of chief matchmaker for international commercial deals. It is worth noting though that despite these efforts, some companies have enough breadth and resources that they do not request or need U.S. government help, while others are reticent to engage for fear of being tagged to the U.S. government and its policies – preferring to be viewed as a multinational company.