US President Donald Trump has made headlines with his claims about business investments during his time in office. Recently, he stated that over $12 trillion had been "practically committed" to investments in the United States under his administration. This figure, if accurate, would be remarkable, especially when compared to the roughly $4 trillion in gross private investment reported in the previous year.
However, experts say that it is too early to confirm Trump’s assertions. The U.S. government only releases data on business investment every three months, and the latest figures reflect only a small portion of his presidency. While there was a noticeable increase in business investment early this year, analysts caution that this spike may have been influenced by factors such as a prior strike at Boeing.
Economist Nick Bloom from Stanford University noted that much of the investment data available now likely reflects projects that were already planned before Trump took office. He suggested that overall business investment might actually be down slightly due to high levels of uncertainty in the market.
One notable example is Roche, a Swiss pharmaceutical company that announced a $50 billion investment in the U.S. over five years. However, some of these projects were already in progress, and the company has expressed concerns that certain Trump administration policies could jeopardize their plans.
Trump often highlights commitments from major companies like Apple and Hyundai to bolster his claims. The White House has a list of these investments, which it says totals around $5.3 trillion. Yet, even this number is misleading. About a third of the investments on the list were either initiated before Trump took office or include spending that is not typically classified as investment, such as salaries and taxes.
Goldman Sachs analyzed the situation and found that the actual new investments resulting from these announcements might be closer to $134 billion. This figure could drop to as low as $30 billion when considering the risk of some projects not materializing or the fact that they would have happened regardless of Trump’s policies.
When questioned about the discrepancies, White House spokesman Kush Desai defended the administration’s approach, stating that it is driving investment into the U.S. He emphasized that many companies have credited Trump and his policies for influencing their plans.
Political and corporate exaggeration is not new, but experts believe that the Trump administration’s aggressive economic interventions have led companies to inflate their investment announcements to gain favor. Martin Chorzempa from the Peterson Institute for International Economics explained that companies may feel encouraged to announce larger investment figures to align with the administration’s goals.
While Trump’s policies may indeed be influencing some investment decisions, there are limits to their effectiveness. The pharmaceutical sector, for instance, is seeing some growth due to these policies, but many investments are still years away from fruition and are primarily focused on high-cost branded drugs rather than affordable generics.
Overall, many analysts predict a slowdown in investment growth in the U.S. this year, primarily due to policy uncertainty. Economist German Gutierrez pointed out that the decline in investment is partly due to industry consolidation, where a few large firms dominate sectors and have less incentive to invest in new projects. He believes that tariffs and other measures are unlikely to solve these underlying issues.
As the situation develops, it remains to be seen how these investment claims will play out and what impact they will have on the U.S. economy moving forward.