US President Donald Trump is touting $8.8 trillion in new investment pledges, equivalent to nearly a quarter of the US economy. Governments in the UAE, Qatar, Japan and Saudi Arabia account for $4.2 trillion of this figure, while companies such as Apple and Nvidia have each promised at least $500 billion. Analysts, however, say the number is exaggerated, as only a fraction of pledges historically materialise, the Financial Times reported.
The reality behind the numbers
The Peterson Institute estimates actual foreign direct investment inflows could reach around $400 billion in 2025 — far below Trump’s headline claim but still a striking figure. Big Tech alone, including Amazon, Meta, Microsoft and Alphabet, has pledged more than $300 billion in capital expenditure. Even at the lower end, the inflows mark one of the biggest shifts in decades, reversing years when American firms poured money abroad.
Shifting tectonic plates of global FDI
Traditionally, US companies invested heavily overseas, especially in China. Now, fDi Intelligence calculates that the inbound-to-outbound ratio for Trump’s second term stands at 41.4 per cent, one of the highest in two decades. The US is becoming almost as prominent a destination as it is a source of global FDI. Much of this trend began with Joe Biden’s Inflation Reduction Act, which spurred green tech investment, but Trump has deepened the shift by forcing trading partners into making pledges.
China’s changing role
While the US draws in new investment, China’s inflows are collapsing. Western investment into China has fallen by 70 per cent since 2022. McKinsey notes that China’s inbound-to-outbound FDI ratio has dropped to 30 per cent, meaning it now sends more investment abroad than it receives. This reflects both geopolitical realignment and China’s focus on investing in non-western markets as western economies increasingly direct money to each other.
Future-shaping industries dominate
Unlike earlier waves of FDI, which centred on cheap manufacturing, today’s flows are powering “future-shaping” industries such as AI infrastructure, semiconductors and green tech. McKinsey reports that projects announced since 2022 could quadruple global battery manufacturing capacity outside China and nearly double global data centre capacity. This could help position the US as a leading semiconductor hub.
Risks and sustainability
Despite the optimism, risks loom. The US lacks enough trained labour to staff new high-tech factories, and tariffs may push up costs. The rapid pace of AI-related investment also raises concerns of overvaluation, with companies like Nvidia buoyed by circular financial flows. A potential correction could shrink the wave of pledges. Still, America’s role in global FDI has clearly shifted, and Trump’s push to draw in growth may become one of his defining economic legacies.
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