Description
The Trump administration has announced $5 trillion in so-called "America First" investment agreements with trading partners, which are aimed at expanding US manufacturing, creating jobs, and strengthening supply chain security. By focusing on these strategic sectors, the investment pledges are effectively an industrial policy that is ironically aligned with Biden-era initiatives such as the CHIPS and Science Act (CHIPS stands for Creating Helpful Incentives to Produce Semiconductors). Partner countries responded to threats of high tariffs by agreeing in principle to invest in projects in such key sectors as energy infrastructure, critical supply chains, and advanced technologies such as artificial intelligence and semiconductor production.
Under President Joseph R. Biden Jr., the United States relied primarily on traditional tools for its industrial policy goals, such as government spending, subsidies, and tax incentives. The Trump administration similarly seeks to expand the US industrial base and bring the production of critical inputs back to America, but it has shifted the financial burden onto foreign partners. This approach leverages US economic and diplomatic influence—including tariffs—to support US industrial capacity. Whether these coercive tactics prove effective is unclear. Even if they succeed, many projects will take years to materialize, as discussed in a recent PIIE Policy Brief.
This PIIE Chart is adapted from Greg Auclair and Adnan Mazarei's Policy Brief, The America First investment pledges: How are they structured and are they realistic?
Data Disclosure
This publication does not include a replication package.
