The United States’ share of global foreign direct investment (FDI) projects surged to a record high in the 12 months leading to November 2024, highlighting the country’s continued economic strength compared to Europe and China. This development comes as former US President Donald Trump begins his second term, with expectations that strong domestic demand and government incentives will sustain the upward trend, according to a report from the Financial Times (FT).
Based on FT analysis of data from fDi Markets, an FT-owned company tracking cross-border investments since 2003, the US accounted for 14.3% of announced greenfield FDI projects in the period, up from 11.6% in 2023. Greenfield projects refer to investments in new facilities and operations, often indicating confidence in long-term growth prospects.
The US attracted over 2,100 new FDI projects during this time, far outpacing China, which secured fewer than 400 projects—a historic low—and Europe’s leading economy, Germany, which saw a dramatic decline to 470 projects from 1,100 a year earlier.
Economists attribute the surge to multiple factors, including robust consumer demand, productivity growth, and incentives such as the Inflation Reduction Act and the Chips Act, which aim to bolster semiconductor manufacturing and other strategic industries. “The US is pulling in more and more global investment projects,” said Innes McFee, a global economist at Oxford Economics. “We expect that US exceptionalism to continue.”
The estimated value of announced greenfield projects in the US rose by over $100 billion to $227 billion in the 12 months to November 2024. Key sectors driving this growth include semiconductors, industrial equipment, renewable energy, aerospace, and construction.
Meanwhile, Europe’s share of inward FDI has fallen sharply, partly due to high energy prices following Russia’s invasion of Ukraine in early 2022. China’s decline in FDI has been linked to “geopolitics” and the west’s increasing focus on “de-risking” from the Chinese market, as noted by Nathan Sheets, chief economist at Citi.
Despite uncertainty over Trump’s trade and taxation policies, economists remain optimistic about the US’s ability to attract FDI. Richard Bolwijn of the UN Conference on Trade and Development (Unctad) stated that the country’s attractiveness to investors is likely to persist, noting that “investment incentives and the economic picture” remain favorable.
The global geopolitical environment is also shaping FDI trends. Rising trade tensions between the US and China have driven companies to diversify supply chains, fueling a shift toward “friendshoring” and reshoring, particularly in strategic industries such as microchips and healthcare.
According to FT, the US’s economic growth is forecast to outpace other advanced economies, with the International Monetary Fund (IMF) predicting a 2.7% expansion for the US in 2025, compared to just 1% for the Eurozone.
While the number of overseas projects by US companies has declined to its lowest level in two decades, excluding the pandemic, this aligns with the Biden administration’s industrial policies, which incentivize domestic production.
