Foreign investment in the US reached $232 billion in 2025, the highest level since 2021, according to preliminary figures from the US Bureau of Economic Analysis. Manufacturing accounted for over half of these inflows, with Japan being the largest investor, injecting more than $50 billion, nearly double Germany's contribution. Key sectors attracting new or expanding investments included transportation and warehousing, computer and electronics manufacturing, and chemicals manufacturing. Boston was named the winner of the 2026 FT-Nikkei Investing in America ranking, which assesses cities on factors like skilled workforce availability, diversity, and ease of doing business.
Speakers at a Financial Times event highlighted stable economic growth, an innovative mindset, deep capital markets, and commercial openness as strong draws for foreign businesses, making the US market "too big to ignore." Examples include the Spanish government's $12 billion biotechnology venture capital fund in Boston and the fact that companies like Toyota, Sony, and Honda generate more revenue or produce more goods in the US than in their home markets. Policies from both the Biden and Trump administrations, such as the Chips Act, Inflation Reduction Act, and tariffs, are encouraging a "reshoring" of manufacturing.
However, concerns are mounting regarding the US's long-term financial stability. The federal debt has ballooned to a record $40 trillion, with interest payments projected to consume 13.5% of federal spending this year, up from 5.2% in 2021. This rise in treasury yields, partly driven by increased inflation since 2022, is prompting fears of the US losing its role as a universally accepted safe haven for investors. Treasury Secretary Scott Bessent's efforts to manage yields through interventions like doubling the rate of long-dated bond buybacks are being viewed with apprehension, with some economists warning of potential dollar debasement.
Furthermore, the unpredictability of US policies, particularly under the Trump administration, with its "capricious tariff regime" and perceived self-enrichment, is creating uncertainty. Tariffs are a significant concern for companies planning large capital investments, as they increase the cost of offshore-made equipment needed for new plants, making long-term planning difficult. While many see the return of manufacturing to the US as positive, the fluctuating costs associated with tariffs are contributing to inflation.
Despite these challenges, the US economy remains the world's largest, most innovative, and one of the most open for business. The ongoing industrial policy aims to rebuild US manufacturing leadership, a process expected to offer opportunities for long-term investors. While some financial analysts express concern about the "sell America" trade, the prevailing sentiment among speakers in New York is optimism regarding the US economy's outlook.
