General Discussion

Last year, the White House compiled a list of 132 “private and foreign investment” announcements “made possible by President Trump’s leadership.” The headline claimed $9.6 trillion [over many years] due to “The Trump Effect.” But most of the biggest investment plans were not “brought in” at all, because Apple, Meta, NVIDIA, Microsoft, Google, Micron, and IBM were already here. Eli Lilly, Pfizer, Merck, J&J, and Abb Vie were here too. Foreign and domestic drug companies do have future investment and R&D plans in the US, but they always did, long before any “Trump Effect.”

Looking over the “Trump Effect” list of $9.6 trillion, Bloomberg found only $3.5 trillion was from other countries, most of that being amorphous pledges.

Items on the list were not “commitments” either—just “announcements” apparently collected from searching the business news. Many items on the list ($2.9 trillion according to the Bloomberg tally) were not even “investments” in any sense. Some were planned purchases of US goods. Others were just routine business expenses, such as expanding or upgrading facilities, training workers, conducting R&D, and even hiring workers. But every upbeat announcement, no matter how far off-topic, was labeled a serious investment plan and added to the list of 132 “projects” attributed, as a matter of faith, to “President Trump’s leadership.”

As for the alleged “surge of private investment,” Figure 2 shows that growth of US fixed investment in plant and equipment was relatively weak last year, just as Figure 1 showed incoming foreign investment was also below par. Real investment has been rapidly falling in manufacturing structures (factories)—the opposite of the President’s familiar justification for high and erratic tariffs on imported manufactured goods (to “rebuild American manufacturing”).