Trump’s investment claims – are tariffs boosting the US economy?

US President Donald Trump may have called prices for his favorite word in the dictionary. But with regard to obsessions, companies’ investment must be close.

Last month, he said that more than $ 12 billions (8.8 tn £) were “practically engaged” on his watch. “No one has ever seen figures as we have done,” he said, crediting his pricing program, tax reductions and deregulation to make the difference.

If it is true, the figure would indeed be surprising, potentially tripling the approximately $ 4 billion in gross private investment that the United States has reported all last year.

So there is a sudden blow of commercial spending to prepare the field for a new golden economic era as Trump claims, or is it the whole theater?

First of all: it is too early in Trump’s mandate to have clear data to assess his claims. The US government publishes business investment statistics only every three months.

January to March, which reflects Trump’s mandate two months, show a good leap in commercial investments, although the one who, according to analysts, was partly due to biased data by a previous Boeing strike.

Other anecdotal evidence and survey indicate that Trump’s impact on investment is much more progressive than it has claimed.

“We have practically no data at this stage and almost all the information we have is probably investment projects that have been planned and ordered last year,” said economist Nick Bloom, professor at Stanford University whose work examines the impact of uncertainty on commercial investment.

“I suppose that the commercial investment is a bit down, not massively … mainly because uncertainty is quite high and that will take a break.”

The Swiss pharmaceutical company Roche, which has announced its intention to invest $ 50 billion in the United States over five years in April, is a good example.

Some of the projects included in the Somme were already underway.

Managers also warned that some of Trump’s ideas – in particular a proposal to revise medication prices – could jeopardize their plans.

“The pharmaceutical industry should review its expenses, including investments,” said the company.

Trump generally argues his arguments towards investment promises made by high -level companies such as Apple and Hyundai.

The White House keeps a Racing Among these announcements, but in early June, he put a total of new investments at around 5.3 TN – less than half of the sum cited by Trump.

Even this figure is inflated.

About a third of the 62 investments on the list include plans that were at least partially underway before Trump took up his duties. For example:

• Stellantis, on the list of a plan of $ 5 billion to reopen a factory in Belvidere, Illinois, initially made this promise in 2023.

• The other commitments include elements that are not traditionally considered as investments – as Speed ​​of expenditure of $ 500 billion from Applewhich includes taxes and wages paid to workers already in the company.

In reality, in mid-May, new investments from announcements probably totaled something closer to $ 134 billion, according to the analysis of Goldman Sachs.

This sum has decreased to as little as $ 30 billion, not to mention the investment supported by foreign governments, once the researchers have taken into account the risk that certain projects do not materialize or have occurred anyway.

“Although it is not economically negligible, such increases would fall below recent titles,” they wrote.

When he supported the figures, the White House spokesman Kush Desai postponed the concerns that the statements of the administration did not correspond to reality.

“The Trump administration uses a multifaceted approach to generate investments in the United States … and no quantity of unnecessary nitpicking and hair transport can refute,” he said in a statement, which noted that many companies had explicitly credited Trump and his policies to shape their plans.

The BBC has approached more than two dozen companies with investments on the white house list.

Many did not respond or refer to the previous statements.

Others have recognized that work on some of their projects was prior to the current administration.

The exaggeration of politicians and companies is hardly unexpected.

But the will of the Trump administration to intervene radically in the economy, with prices and other changes, gave companies reasons to inflate their plans in a way that flatters the president, said Martin Chorzampa, principal researcher at the Petersen Institute of International Economics.

“An advertising company is a way to obtain certain current advantages, without necessarily being held to those [spending pledges] If the situation changes, “he said.” There is a strong incentive for companies to provide such a large number as possible. “”

This does not mean that Trump’s policies do not make a difference.

Price threats were “definitely was a catalyst” for pharmaceutical companies in order to plan more manufacturing in the United States, a key source of sectoral profits, explains Stephen Farrelly, a global advance for pharmacy and health care in ING.

But, he adds, there are limits to what threats can achieve.

Pharmaceutical investments should take place over time – a decade in some cases – in a sector that was ready for growth anyway.

And they come from companies selling brand drugs – not cheaper generic drugs on which many Americans count and which are manufactured in China and India.

Farrelly also warned that investments in the sector could be threatened in the long term, given uncertainty about the government’s approach to prices, drug pricing and scientific research.

Overall, many analysts expect the growth in investments to slow down in the United States this year due to political uncertainty.

German economist Gutierrez of Washington University says Trump is right to want to increase investments in the United States, but believes the emphasis on global competition that badly diagnoses the problem.

His own work revealed that the drop in investment is due in part to the consolidation of the industry. Now, some large companies dominate the sectors, there is less incentive to invest to compete.

In addition, the types of investments that companies make are generally cheaper elements such as software rather than machines and factories.

It is unlikely that prices, according to Professor Gutierrez, solve these problems.

“The way it is done and the type of instruments they use are not the best way to achieve this goal. You just need to really advance this,” he said.