US Tariffs Threaten $2 Trillion in Global Investments: Financial Times

By Staff, Agencies

The Financial Times (FT) reported on Tuesday that since the beginning of Donald Trump's presidency, companies have pledged to invest at least $1.9 trillion in the US, arguing that the spending bonanza is under the threat of a tariff war.

Overseas and US companies have pledged $1.9 trillion in investments, according to Financial Times analysis, compared to $910 billion in private manufacturing investments from the start of Biden's presidency until October 2024, per the US Commerce Department.

According to the report, recent commitments include $100 billion from SoftBank and chipmaker TSMC, $20 billion from CMA CGM, $500 billion from Apple, and $5 billion from Stellantis.

 However, many of these pledges come from businesses with global supply chains vulnerable to the tariffs announced by Trump against China, India, and the EU.

FT report mentioned that Trump claimed in late March that money was "pouring in" due to his trade policies.

According to the report, Japan’s Foreign Ministry stated on Monday that Prime Minister Shigeru Ishiba expressed strong concerns during a phone call with Trump, warning that US tariff measures could weaken investment capacity among Japanese companies, which are the top foreign investors in the US.

The Capgemini Research Institute predicts US companies could spend $1.1 trillion on reshoring manufacturing by 2027, up from the $750 billion forecast for 2024.

Scott Lincicome, vice president of the Cato Institute think tank, warns that a decline in corporate earnings, higher production costs, and a US economy slowdown due to tariffs could decrease investment interest.

According to the report, Stellantis will furlough 900 workers and halt production in Canada and Mexico due to tariff uncertainty. 

 Experts caution that many investment pledges may include pre-existing plans, making it difficult to predict how much will materialize.

The FT report mentioned that Apple announced a $500bn investment in February but saw a loss of over $300bn in market value after Trump introduced tariffs that affected its supply and production hubs in Asia.

 While Apple already invests heavily in the US, the impact of Trump's policies remains unclear.

South Korea's Hyundai pledged $21 billion over three years to expand US production and create 100,000 jobs, despite facing a 25% tariff on foreign-made cars sold in the US and an additional 25% tariff on all South Korean imports.

SoftBank, led by CEO Masayoshi Son, surpassed a $50bn pledge made after Trump's 2016 election win, creating over 50,000 jobs, according to FT.