Foreign investment in the US jumped in 2025 after falling for four years in a row, a possible result of companies rushing to minimize exposure to President Trump’s tariffs.
International investors spent $232.2 billion in the US last year, mostly to acquire American businesses – a 49.5% jump from the previous year, the Bureau of Economic Analysis said Wednesday.
Employment at newly-acquired or expanded foreign-owned businesses in the US accounted for 213,100 jobs, according to the data.
“Part of it is going to be because of the tariff impact,” Luke Tilley, chief economist for M&T Bank and Wilmington Trust Investment Advisors, told The Post.
“There is going to be a natural reaction to wanting to be domiciled in the US,” Tilley said. “There are some advantages in terms of the amount of tariffs you want to pay.”
It was also a favorable spending environment for foreign investors, since the US dollar was weaker throughout much of 2025, giving many countries a beneficial exchange rate, Tilley said.
The largest chunk of new direct investments – $50.7 billion – went toward publishing industries, according to the BEA.
Publishing includes newspaper, periodical and book publishers, which brought in $2 million – and software publishers, which raked in the rest of the $50.7 billion.
“The AI trade is absolutely impacting all investment data, whether we’re talking about foreign direct investment here or the investment in data centers,” Tilley told The Post.
After publishing industries, chemicals manufacturing and plastics and rubber products manufacturing saw the next largest investments, at $45.4 billion and $19 billion, respectively. Manufacturing industries saw a combined $121.8 billion in new foreign investments.
The BEA’s survey respondents are kept confidential by law, so it is unclear which specific investments helped drive the boom, according to the agency.
The White House has touted several multi-billion dollar commitments in US manufacturing as a result of Trump’s foreign policy.
Japanese tech firm SoftBank and US firms OpenAI and Oracle last year announced a partnership called Project Stargate, committing a $500 billion investment in AI infrastructure in the US over the next four years. That included an immediate deployment of $100 billion.
According to the BEA, Japan-based companies made the biggest investment in the US last year, at $50.5 billion. Germany and Canada contributed the second- and third-largest investments, at $26.7 billion and $23.5 billion, respectively.
By region, the largest contributor was Europe, which invested $116.6 billion – or more than 50% of all new investment in 2025.
By state, California – home to Silicon Valley – received the most foreign investment at $59.7 billion. Texas and Pennsylvania followed at $21.5 billion and $20.9 billion, respectively.
The Trump administration has also boasted of several massive investments in domestic manufacturing from US companies, including a $600 billion pledge from Apple; $600 billion from Meta; and $500 billion from Nvidia.
As for 2026, the US is still a fairly attractive investment environment for foreign investors since the greenback remains weak – but there are a few new challenges, according to Tilley.
“The impacts of the Iran war are likely to hit developed nations and investors in Japan and Europe more than it has hit the US, so that is something that will detract from foreign investment here,” he told The Post.
Along with geopolitical uncertainties, the future movement of interest rates is still up in the air.
The difference in central bank activity around the world has largely been driving the favorable exchange rate, according to Tilley.
If other countries start hiking rates, and the Federal Reserve does not, that would further weaken the US dollar, creating an even more favorable environment for foreign investment.
But recent economic data showing a resilient labor market and rising inflation have raised concerns that the Fed could consider raising interest rates – disrupting that exchange rate.
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