Top US trading partners pledged to invest $5 trillion in America. These researchers have doubts.

President Trump’s $5 Trillion Foreign Investment Pledges Face Scrutiny

President Donald Trump’s administration has secured promises of trillions in foreign investment for the United States, but a new study casts doubt on whether these massive commitments will ever materialize.

Research published Tuesday by the Peterson Institute for International Economics questions both the feasibility and implementation of over $5 trillion in investment pledges obtained from major trading partners including the European Union, Japan, South Korea, Taiwan, Switzerland, Liechtenstein, and Persian Gulf states.

“How realistic are these commitments? The short answer is that they are clouded with uncertainty,” write economists Gregory Auclair and Adnan Mazarei in their analysis of the deals negotiated under threat of punitive tariffs.

The White House has touted an even more impressive figure of $9.6 trillion in total investment commitments, while Trump himself has referenced much higher numbers—$17-18 billion—though researchers note “the basis for his claim is not clear.”

To put these figures in context, annual private investment in the United States currently runs at about $5.4 trillion, while total foreign direct investment in 2024 amounted to just $151 billion. The disparity between historical foreign investment levels and Trump’s pledges raises immediate questions about plausibility.

The researchers highlight several concerning factors about the agreements. Many lack clear metrics for verification and come with varying timeframes. The European Union’s $600 billion pledge, for example, “carries no legally binding commitment,” according to the report.

Financial capacity is another major concern. The Gulf states in particular would struggle to fulfill their obligations. While Saudi Arabia could meet its targets “with some difficulty,” the United Arab Emirates and Qatar would face greater challenges and might need to borrow substantially to finance their pledges.

“These agreements have been reached under duress,” explained Mazarei, a former deputy director of the International Monetary Fund. “It’s not necessarily being done willingly.”

This coercive approach creates additional uncertainty, particularly as the Supreme Court prepares to rule on the legality of Trump’s tariff strategy as early as February. If the Court strikes down these tariffs, partner nations may seek ways to abandon their commitments. However, the administration could potentially implement alternative tariffs if current ones are deemed illegal.

When asked for comment, White House spokesman Kush Desai defended the approach: “President Trump agreed to lower tariffs on countries we have trade deals with in exchange for investment commitments and other concessions. The president reserves the right to revisit tariff rates if other countries renege on their commitments.”

Despite their skepticism, the researchers acknowledge potential benefits of the investments that do materialize, including job creation, economic growth, and more secure supply chains through increased domestic production.

In some ways, Trump’s approach parallels the Biden administration’s industrial policy, which also aimed to boost American manufacturing. However, the methods differ significantly. While Biden used taxpayer dollars to fund infrastructure and incentivize investments in green technology and semiconductors, Trump is leveraging tariff threats to make foreign countries and their companies foot the bill. Trump has also abandoned Biden’s clean energy focus in favor of promoting fossil fuels.

The Peterson researchers express concern about the decision-making process for these investments, questioning whether sound economic principles would guide implementation. “This approach may yield real investments and jobs,” they write, “but it raises familiar industrial policy concerns: opaque projection selection, weak accountability, and the risk that political criteria crowd out economic efficiency.”

As these investment pledges move from press releases to implementation, economists, industry leaders, and policymakers will be watching closely to see whether the trillions promised will transform into actual factories, jobs, and economic growth—or remain largely unfulfilled political commitments extracted under threat of trade penalties.