UBS: 90% of Foreign Capital Flowing into the U.S. Is M&A, Manufacturing Reshoring Data Questioned
nashnova research
A UBS report shows 2025 U.S. inbound FDI totaled just $232 billion — below every pre-pandemic year after inflation — and 94% went to acquiring existing firms, not building new capacity. The White House's reshoring narrative finds little support in the actual numbers.
Is foreign capital really flooding into the U.S.?
UBS economist Arend Kapteyn notes that 2025 new inbound FDI totaled $232 billion, roughly $30 billion below the ten-year average.
Adjusted for inflation, that figure is lower than every pre-pandemic year.
This means → strip away the headline numbers and actual foreign commitment to the U.S. is weakening, not strengthening.
What about the White House's "$20 trillion" claim?
President Trump said more than $20 trillion in foreign investment has entered during his second term, calling it "five to seven times more than any country, ever," with a projected rise to $25 trillion.
The White House investment tracker lists pledges from the UAE, Qatar, Japan, Saudi Arabia, India, and South Korea alone totaling over $5 trillion.
In plain terms = the White House counts pledges; UBS counts actual inflows. The two figures differ by an order of magnitude — entirely different measuring sticks.
Where did the money that actually arrived go?
Bureau of Economic Analysis data shows that of 2025 new FDI, 94% went to acquiring existing U.S. companies, just 2% to establishing new businesses, and 4% to expanding existing foreign-owned operations.
This means → foreign capital is changing who owns an American company, not building new factories or production lines.
In plain terms = the money came in, but it did not become new productive capacity. Buying an existing firm and building a plant from scratch are fundamentally different things.
What does the sector breakdown reveal?
The 2025 FDI uptick relative to 2022–2024 was driven mainly by media/telecom and primary metals — two narrow sectors.
There was no broad-based manufacturing investment boom of the kind the White House describes.
This reflects a highly concentrated inflow, not a systemic reshoring signal.
How do we explain the gap between pledges and reality?
Kapteyn acknowledges a time lag between investment pledges and actual disbursement, which partly explains the gap between White House figures and BEA data.
But his more critical point: even if pledges eventually materialize, how much will translate into new productive capacity rather than mere ownership transfers?
In plain terms = it is not just whether the money arrives — it is whether it builds a factory or buys one. The latter does almost nothing for manufacturing reshoring.
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