Foreign investment not happening.....

In states, tariffs aren’t yet producing the surge of foreign investment Trump is promising

The Trump administration has touted investments to reassure Americans who are uneasy about his tariffs. But economic development officials say those investments have slowed amid economic uncertainty.

By Daniel Desrochers

President Donald Trump has claimed his surge of new tariffs will produce trillions of dollars of foreign investments in the U.S. economy. But some of the people working to lure those investments to U.S. cities and states say they’re not seeing the investment boom, at least not so far.

To the contrary, economic development officials and lawmakers from several states say that the uncertainty fueled by Trump’s on-again, off-again trade wars is keeping many foreign businesses from pouring money into the U.S. market right now. And it signals the uneven impact the tariffs are having on reshoring American manufacturing — Trump’s stated goal for raising rates to the highest levels in a century.

“One of our contacts described it to me as driving a car in the fog,” Lee Lilley, North Carolina’s Commerce Secretary, said in an interview Tuesday at the Commerce Department’s SelectUSA Summit, an annual conference aimed at promoting foreign investment in the U.S. “You’re driving along, the fog descends, you slow the car down. Depending on how bad the fog is, you might pull the car over and turn on the blinkers. And we feel like we’re in that space a little bit.”

Buffeted by news of companies raising prices as a result of the president’s dramatic tariff increases, the Trump administration has made economic development pledges a centerpiece of its messaging strategy. As businesses across the country fret over the administration’s global trade war, the White House has responded by releasing a running list of billion-dollar commitments from major companies, a sign, the president and his aides argue, that his economic strategy is working by forcing more companies to build their products in the U.S.

“There’s never been anything like what’s happening right now to the United States, I can tell you. Nothing,” Trump said at a roundtable in the United Arab Emirates, part of a multi-day swing through the Middle East where the president touted a slew of new foreign investments. He claimed that, as a result, the U.S. is headed toward $12 trillion in investments since he took office. “There’s never been anything like it. We’re at a level that no country has seen.”

The White House, however, is indiscriminate about what announcements it claims come from “the Trump effect.” Some have been in the works for years before they are announced. Others are in line with what the company would have invested, regardless of the tariffs. Some are inflated, adding previous investments to new pledges.

The reality for economic developers is more complicated. Officials work for years building relationships that can one day, hopefully, translate into hundreds, or even thousands, of well-paying jobs. They go to conferences, chat up companies and foreign investors, tune-up their workforce development programs at community colleges and attempt to carve out a tax landscape that will help lure business.

“These are large investments that businesses are making and they’re going to do them thoughtfully and they’re going to take time,” said Barbara Coffee, the director of economic initiatives for the City of Tucson, Arizona. “When they’re doing site searches, just to determine the location, it takes years, two and three years.”

Some major companies have leaned into Trump’s affinity for splashy investment announcements. Apple announced a $500 billion investment in February, promising to expand facilities across nine states and create a new factory in Texas. But that spending may have already been planned, according to the Wall Street Journal.

Kush Desai, a spokesperson for the White House, said the administration is focused on laying the groundwork for future investment, noting that gross domestic investment spiked by 22 percent in the first quarter of 2025. That, however, was before most of the president’s most dramatic tariff increases took effect.

“The Trump administration is using a multifaceted and nuanced approach to deliver economic relief for the American people while laying the groundwork for a long-term restoration of American Greatness,” Desai said. “President Trump’s tariffs are driving historic investments into the United States in conjunction with a full suite of supply-side reforms, from deregulation to historic tax cuts.”

While a favorite benchmark for both Democratic and Republican lawmakers alike, economic development pledges are notoriously difficult to pin down. Companies sometimes fail to follow through with the plan, or spread out the investment over a longer period of time depending on economic circumstances. Congress even passed a law in 1995 that encourages businesses to put a disclaimer on news releases about investment decisions, saying that they are subject to change.

The Trump administration has been so eager to show signs of economic growth that it has celebrated companies that are merely “considering” increasing production in the United States. In April, as the markets were see-sawing after Trump paused his global tariffs, the Trump administration highlighted news articles that French luxury goods giant LVMH was considering expanding its U.S. footprint, that the olive oil company Dcoop was pondering whether to increase U.S. production and that BMW was considering adding shifts to U.S. factories.

While BMW has yet to officially add shifts, other auto manufacturers have highlighted similar moves. Last week, Honda announced that it would move production of its popular CRV from Ontario to the U.S., the latest blow to the Canadian auto manufacturing industry as Trump has a 25 percent tariff on vehicles imported into the U.S.

But those announcements may conceal the economic reality. Even as the administration has touted decisions from auto companies like Honda and Stellantis to move production to the U.S., auto manufacturing jobs are down 20.8 percent from 2024, according to the Bureau of Labor Statistics. Auto manufacturing jobs fell 4.7 percent between March and April, when Trump’s 25 percent tariffs on foreign auto imports went into effect.

Other industries are watching the domestic economic and political climate as well. Despite a $50 billion investment pledge, Roche, a pharmaceutical company, said it was evaluating that pledge after Trump issued an executive order aimed at driving down drug prices.

“We still intend to invest $50 billion in pharmaceutical R&D and manufacturing and diagnostics in the U.S.,” said Dean Mastrojohn, a spokesperson for Roche. “However, should the EO go into effect, the business reality is that the pharma industry would need to review its expenses, including investments.”

The sense of economic uncertainty has unsettled lawmakers from both political parties. While Sen. Ron Johnson (R-Wisc.) has thus far been unwilling to sign onto legislation to remove Trump’s power to impose tariffs or implement trade deals unilaterally, Johnson said Wednesday at a POLITICO Live event that he’s concerned about how uncertainty surrounding tariffs is affecting businesses in his state.

“What I’m hearing from Wisconsin businesses, manufacturers, the National Association of Manufacturers, The Business Roundtable, is right now investment is on hold,” said Johnson. “Again. I come from the private sector. You want as much certainty and stability” as possible.

Despite Trump’s fast-changing policies, local economic development officials say businesses continue to express interest in making investments. Officials from several states said in interviews at the SelectUSA Summit that they have plenty of new investment deals in their pipeline, even if they are slower to make a major decision amid the current uncertainty.

“I would say it hasn’t come to a full stop,” Michelle Grinnell, the senior vice president for market growth and business attraction in Michigan. “Some of those timelines have slowed a little bit, especially projects that are maybe earlier in the process are taking a minute. But projects that have been moving forward and are a little more mature in the process, we’re seeing those continue.”

Still, investments are projected to slow in 2025, according to industry analysts. The consulting firm Deloitte projected that investments would slow slightly from 3.7 percent 2024, before picking up significantly once the upheaval produced by the administration’s trade and tax policy fades.

That’s a hopeful sign for local officials like Lilley, who’s eager to bring more jobs to North Carolina’s growing population.

“I think the more we can get that certainty back, the more our investors can pencil out the project and decide where it works and when it works and on what timeline,” Lilley said. “Because the capital is clearly there, the demand is really there.”