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Foreign investment in the United States rose in 2025 after declining for four straight years, with international investors spending $232.2 billion in the country last year, according to the BEA. The figure represents a 49.5% increase from the previous year, driven largely by acquisitions of American businesses.
International investors spent $232.2 billion in the US in 2025, mostly to acquire American businesses, marking a 49.5% jump from the prior year, the BEA said Wednesday.
Employment tied to newly acquired or expanded foreign-owned businesses accounted for 213,100 jobs, based on the data.
Japan-based companies made the biggest investment in the US last year, at $50.5 billion. Germany and Canada followed with $26.7 billion and $23.5 billion, respectively.
By region, Europe was the largest contributor, investing $116.6 billion—more than 50% of all new investment in 2025.
At the state level, California received the most foreign investment at $59.7 billion. Texas and Pennsylvania followed with $21.5 billion and $20.9 billion, respectively.
Luke Tilley, chief economist for M&T Bank and Wilmington Trust Investment Advisors, said part of the increase may reflect tariff-related behavior.
“Part of it is going to be because of the tariff impact,” Tilley told The Post.
“There is going to be a natural reaction to wanting to be domiciled in the US,” he said. “There are some advantages in terms of the amount of tariffs you want to pay.”
Tilley also pointed to currency effects, saying the US dollar was weaker throughout much of 2025, which improved the exchange-rate position for many countries investing in the US.
The article also noted that the Trump administration has highlighted large domestic manufacturing investment pledges by US companies, including a $600 billion pledge from Apple, $600 billion from Meta, and $500 billion from Nvidia.
For 2026, Tilley said the US remains an attractive investment environment for foreign investors because the dollar is still weak, but he cited new challenges.
“The impacts of the Iran war are likely to hit developed nations and investors in Japan and Europe more than it has hit the US, so that is something that will detract from foreign investment here,” he told The Post.
He also said geopolitical uncertainty and uncertainty around future interest-rate moves could affect the dollar and investment conditions.
Tilley attributed the favorable exchange-rate environment largely to differences in central bank activity across countries. He said if other countries raise rates while the Federal Reserve does not, the dollar could weaken further, supporting foreign investment.
However, he added that recent economic data showing a resilient labor market and rising inflation has raised concerns that the Fed could consider raising interest rates, which could disrupt the exchange-rate advantage.
