Poll: U.S. Popularity PlungesNot long ago, market research firm RoperASW conducted a survey of 30,000 people in 30 countries that sought to determine foreigners' opinions of the U.S., and found they had undergone a historic plunge. According to a report in the magazine American Demographics, the survey found that only 15% of Indonesians, for instance, felt very favorable or somewhat favorable toward the U.S. That's down from 61% who held that view a year ago. Not surprisingly, Islam-dominated countries had the greatest jump in negative vibes toward things American. But the number of Russians who saw the U.S. in a favorable light also sank 25 percentage points in a year, while the share of French, Germans and Italians with positive feelings toward America fell by 20, 16 and 10 percentage points, respectively. The magazine said the study pointed out that Canadians and the British likewise felt less positive toward the U.S. than in the prior year.
Watch the Top LineIn addition to these obvious sources of distrust, there appears to be a growing sense of unease overseas about the growing extension of U.S. military power in their lands. According to a new book by Chalmers Johnson, a University of California-San Diego professor, the Pentagon now occupies 702 bases in 130 countries on every continent but Antarctica. In the book
Goodwill Seemingly in Short SupplyOf course, it is possible that negative views will not last much longer and that a swing back in favor of U.S. popularity is overdue. Mark Headley, portfolio manager at the Matthews Funds and an expert on the Chinese, Korean and Japanese markets, says his contacts distinguish between American consumer products and American politics. "Most Asians I talk to hate Bush's policies -- absolute antipathy," he said. "In South Korea, they think he has made the Korean peninsula more dangerous. In China, they think he has goaded the Taiwanese to be more independent and confrontational. Anywhere there is a Muslim population, they are extremely unhappy with his policies across the board. And in Japan, there are tremendous misgivings about sending troops to a forward deployment for the first time since World War II. But none of this has stopped Chinese accountants or factory managers from buying cool new Motorola phones or stopped the Japanese from eating at McDonald's." If you go beyond the consumer to the wholesale and distribution level, though, Headley says American companies are losing their "edge of goodwill" when competing against European or Asian companies for contracts ranging from airliners to concrete. "In Korea and Japan, they have always liked American troops for their stabilizing influence, but that has evaporated," he said. "They now see us as untrustworthy, don't understand our actions and blame us for the breathtaking rise in the price of their most expensive imported product -- Middle Eastern oil." Headley said the greatest danger is that rising resentment has pushed the moderates in Muslim-dominated democracies to act more anti-American to keep pace with their constituencies. Companies that might potentially feel the greatest pain would be the ones that currently enjoy the greatest success: Altria Group ( MO), maker of Marlboro cigarettes; Coca-Cola; and Procter & Gamble ( PG). In contrast, large-cap companies that could feel the least impact would be ones with the smallest exposure to foreign consumers or wholesale buyers, such as homebuilders, utilities, health-care insurers and specialized retailers. I've listed five in the following table.
|Isolationist Plays |
Large-caps with relatively little overseas exposure
|Company||Market Cap (billions)||March 30 Close|
|CenterPoint Energy (CNP:NYSE)||3.4||11.35|
|Pulte Homes (PHM:NYSE)||6.8||55.71|
|Source: MSN Money|