Despite loud whispers of a slowdown—or even a potential recession—and despite President Donald Trump's now-chaotic tariff tantrums, the US is gaining big in one key area that isn't being talked about much: attracting capital. A staggering $1.7 trillion in foreign and domestic investment commitments, made in less than three months, underlines long-term confidence in the world's biggest economy.
When companies like Apple and TSMC, and countries such as Saudi Arabia, bet on the American economy, they don't do it on a whim: they do it because they see long-term profitability.
Trump's pugilist-like tariff jabs may be earning him more adversaries than he bargained for, but he has been demonstrating his knack for convincing countries and corporations to invest big in the US economy to maintain its economic edge. Amid the doom and gloom about a potential US recession, one cannot overlook the sheer gravitational pull of its market—and indeed, the president's personal pull.
For Trump, this heavy influx of investment should be seen as a strategic counter to recession fears. Infrastructure projects, high-tech manufacturing and AI development may act as a buffer against economic turbulence in the medium to long term. If these investments materialise as promised, they could stabilise growth and reinforce America's position as the world's leading innovation hub.
Billion-Dollar Promises
Between January 20—when Donald Trump took the oath for a second time—and the end of March, three major investment commitments stood out:
- Saudi Arabia pledged a massive $600 billion investment in the US over the next four years, with Trump hinting he might push that figure to $1 trillion. He called Saudi Crown Prince Mohammed bin Salman a “fantastic guy” who might just oblige. Typically, the announcement by the Saudis remained vague on details.
- Apple has committed a staggering $500 billion over four years, aiming to create 20,000 jobs and establish a new factory in Houston to produce AI-driven server infrastructure.
- The trio of OpenAI, Oracle and SoftBank have pledged $500 billion for a project dubbed Stargate, designed to supercharge America's AI infrastructure. To emphasise: half a trillion dollars in investment is aimed at keeping the US ahead in the race for AI dominance over China and others.
Then there are other, much smaller, but significant investment commitments:
- Taiwan Semiconductor Manufacturing Co. (TSMC) is pledging $100 billion in the US. Trump himself announced the news at the White House alongside TSMC's CEO, marking a major step in America's effort to reclaim dominance in semiconductor production. This new commitment adds to the $65 billion already pledged for manufacturing facilities in Arizona, bringing TSMC's total US investment to $165 billion.
- Eli Lilly is investing $27 billion to build four new pharmaceutical manufacturing plants, expected to generate 3,000 high-skilled jobs and employ 10,000 construction workers.
- Hyundai Motor Group has announced plans to invest $21 billion in the US between 2025 and 2028 to drive manufacturing growth
Smart Focus
Trump's push to incentivise investment—particularly in critical sectors such as semiconductors and AI—aligns with his broader geopolitical strategy. For example, by encouraging TSMC's expansion in the US, his administration is not only securing America's access to advanced chip technology—a vital component in everything from smartphones to fighter jets—but also keeping China at bay.
Trump's “America First Investment Policy” memorandum, issued on February 21, aims to streamline investments from allies while tightening the noose on China. While the White House is not imposing immediate regulations, it is directing agencies to craft rules that ease inbound investments from friendly nations while making it harder for US money to flow to adversaries like China—a continuation of the administration's broader strategy to decouple from Beijing.
Promises, Just Promises?
But beyond the hype and hoopla, the real question remains: how much of this investment will actually materialise? Will TSMC's chips ever roll off Texas assembly lines at the promised scale? Will Apple really pour half a trillion dollars into the US economy, or is this another PR stunt with creative accounting? And will the Saudis follow through this time, or will their billions once again remain a mirage?
Indeed, we have seen this playbook before during President Trump's first administration when foreign investment pledges made headlines. Some may still remember the much-hyped $350 billion Saudi investment promise. By the US government's own account, only a fraction of it has actually materialised so far. In recent years, FDIs into the US have witnessed more dips than peaks.
Let Caution Prevail
And then, let us not forget the latest spanner in the works. While Trump boasts about foreign investment, the Federal Reserve is busy reminding everyone that inflation is still lurking, interest rates remain high and the cost of borrowing is not exactly investor-friendly. Meanwhile, the US dollar recently suffered its worst stretch since November 2022, dropping by 3.4%. Add to that Germany's plans for massive spending on defence and infrastructure—potentially fuelling an economic boost in Europe while Washington dithers on Ukraine aid—and the global investment landscape starts to look a little less predictable.
Trump 2.0 was supposed to be the grand revival of "America First", with trade tariffs acting as the magic wand to resuscitate US manufacturing, safeguard jobs and fill government coffers. Instead, markets and investors have been left jittery. Trump himself isn't exactly radiating confidence, at least not all the time. A few weeks ago, he even hinted at a looming recession, branding it a "period of transition”. Treasury Secretary Scott Bessent is already preparing the public for economic turbulence, calling it a "detox period”.
Smoke And Mirrors?
The reality is that investors—no matter how much they may like Trump's tax cuts and deregulation—detest uncertainty. And nothing about Trump 2.0 suggests a stable, predictable business environment. Trade policies are in flux, tariffs could rise overnight, and global allies are less inclined to play along with Washington's demands. The market remains on edge, with businesses and economists alike bracing for whatever comes next.
So, will these investment pledges turn into economic gold, or are we looking at another round of smoke and mirrors?
Only time will tell, as the cliché goes. However, this time, Trump appears more organised, more ready and even more aggressive. He seems less willing to tolerate delays. The mantra of "economic nationalism" is back with a vengeance. He wants to do onshore manufacturing. He has slapped tariffs on imports. And some might say he has bullied vulnerable allies into economic deals that put “America First”. Many are ready to bet that this strongman approach could actually deliver. At least Trump believes it would.
(Syed Zubair Ahmed is a London-based senior Indian journalist with three decades of experience with the Western media)
Disclaimer: These are the personal opinions of the author
