Factories Reaping Rewards from Biden’s Incentives for Foreign Investment

The analysis reveals that two-thirds of foreign direct investment, excluding corporate acquisitions, was in manufacturing in 2022. This is more than double the average share from 2014 to 2021.

Although the surge is relatively small in the context of the overall economy, administration officials see it as an encouraging sign that multinational companies are being enticed to invest in America through Mr. Biden’s industrial policy agenda. The analysis also notes a significant increase in construction spending on new manufacturing facilities in the United States compared to England, continental Europe, and other wealthy Group of 7 nations.

According to a Commerce Department survey, investors pouring money into America’s factories are primarily concentrated in Britain, continental Europe, Canada, Japan, and South Korea. Only a small fraction of the investment appears to be associated with China.

The foreign investment is mostly flowing into computer and electronics manufacturing, particularly semiconductor production, which was a focus of a bipartisan industrial policy bill signed into law by President Biden. The signing of a climate, health, and tax bill later that summer, which included significant subsidies for renewable energy technology manufacturing, further attracted investments.

Since the enactment of these laws, companies, including foreign ones like Taiwan Semiconductor Manufacturing Company, have announced over $500 billion in planned investments in the United States. These investments include semiconductor plants in Arizona, advanced battery facilities in Georgia, and more.

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