Alex Irwin-Hunt, fdiintelligence.com :
The US is becoming a less prominent source of capital in an early sign that President Donald Trump’s ‘America First’ agenda is leading companies to shift investment plans to support US manufacturing and jobs.
Preliminary fDi Markets data for the first two months of 2025 show that the US’s role as a source of global foreign direct investment has continued to diminish under Trump 2.0. The US’s ratio of inbound-to-outbound greenfield FDI projects in January and February 2025 stood at 45 per cent, a record high and up from 42.7 per cent for all of 2024.
All the while, the US’s main geopolitical competitor China is doing the opposite. In the first two months of 2025, China’s inbound-to-outbound FDI project ratio fell to a record low of 25 per cent, down from 52 per cent in 2016. China has shifted from being a capital importer to a capital exporter as US multinationals have set out more plans to invest at home.
These figures are from the Trump FDI tracker, which maps the latest news and data on FDI in and out of the US. The Trump administration has already imposed universal punitive tariffs, threatened to scrap Joe Biden’s industrial policies and pushed ahead with a new investment policy framed as ‘economic security is national security’.
Trump’s tariff policies “are already affecting FDI in that many companies, both foreign and domestic, are seeking to expand or establish operations in the US so that they can avoid the new costs of doing business elsewhere”, says Philip Ludvigson, partner at King & Spalding and a former Treasury Department official in Trump’s first term.
Trump 2.0 has championed the “stick” in his investment policies. They centre on using tariffs to pressure domestic and foreign multinationals to shift their investment decision-making.
This is in stark contrast to the “carrot” approach taken by his predecessor Joe Biden.
The Bidenomics re-industrialisation plan leaned heavily on incentive-laden legislation such as the Inflation Reduction Act and the Chips and Science Act to subsidise investment.
Greg Le Roy, executive director of incentives watchdog GoodJobsFirst, notes that while Biden’s plan “wasn’t perfect”, it was “intentional” and showed signs of working. “Trump inherited a lot of manufacturing momentum, but it will not last if he gets the US into trade wars,” he says.
Some 326 greenfield FDI projects valued at ore than $38bn were announced in the US during the first two months of 2025, according to preliminary fDi Markets data. These were historically high project numbers and the second highest capex figure ever after the same two months of 2024.
But there is a different picture across Trump’s first and second presidential terms. Cumulative greenfield FDI pledges in the US have tracked lower during Trump’s current time in office than his predecessor Joe Biden.
Harry Moser, president of Reshoring Initiative, a data and advocacy group, says that “if Trump can stabilise a coherent industrial policy” there is an opportunity for more factories to be reshored to the US. But given US manufacturing costs are not competitive, a weaker US dollar and universal permanent tariffs will be needed, he adds.
“Both take years. Trump’s programme is likely to self-destruct before it bears fruit,” says Mr Moser, who adds that companies will not seriously commit to investment in the US unless
Trump’s policies are firm and long-term.
Looking ahead, President Trump has vowed to make the corporate tax cuts of his first term permanent.
“President Trump deserves a ton of credit for permanently reducing the US’s corporate income tax rate” from 35 per cent to 21 per cent in 2017, says Jonathan Samford, president of Global Business Alliance.
“Unfortunately, there are a couple of proposals under consideration this year that would put international companies at a major disadvantage,” he adds, noting they are intended to target FDI source countries that are implementing the global minimum tax.
