Top US trading partners pledged more than $5 trillion in investment in America, responding to President Donald Trump’s use of tariff threats to extract concessions. But a study released Tuesday by researchers at the Peterson Institute for International Economics raises substantial doubts about whether the money will actually materialize.
“How realistic are these commitments?” wrote Gregory Auclair and Adnan Mazarei of the Peterson Institute. “The short answer is that they are clouded with uncertainty.”
The researchers examined investment pledges made in 2025 by the European Union, Japan, South Korea, Taiwan, Switzerland, Liechtenstein and the Persian Gulf states of Saudi Arabia, Qatar, Bahrain and the United Arab Emirates.
The pledged amounts could help spur economic growth and job creation if realized. But the commitments raise concerns about how projects would be selected, with limited transparency and weak accountability mechanisms, and some countries would face financial strain meeting their obligations.
Competing figures cloud the picture
The investment figures clash across official statements. Trump has claimed pledges as high as $17 trillion or $18 trillion, though the Peterson researchers note “the basis for his claim is not clear.” The White House has published a figure of $9.6 trillion that includes public and private commitments. The $5 trillion figure studied by the Peterson Institute represents the commitments by the major trading partners examined.
For context, total private investment in the United States was running at a $5.4 trillion annual pace. In 2024, the last year for which figures are available, total foreign direct investment in the United States amounted to $151 billion.
Structural obstacles to fulfillment
The Peterson researchers identified several challenges to the pledges becoming reality. The European Union’s commitment to invest $600 billion in the United States “carries no legally binding commitment,” they wrote. Time horizons for the pledges vary, and the metrics for verifying them are “generally unclear.”
For the Gulf states, the pledges present particular challenges. “The commitments are large relative to their financial resources,” the researchers wrote. Saudi Arabia appears capable of meeting its targets, “with some difficulty.” The United Arab Emirates and Qatar would find meeting their pledges even harder and might have to finance the investments through borrowing.
“In all three cases, the commitments are nonbinding, and investments from these countries could fall well below headline numbers,” the researchers wrote.
Uncertainty over tariff legality
Trump used the threat of punitive tariffs—import taxes—to extract the investment commitments and other concessions from the trading partners. Adnan Mazarei, a former deputy director of the International Monetary Fund, said in an interview that “these agreements have been reached under duress. It’s not necessarily being done willingly.”
The legal standing of those tariffs is uncertain. The Supreme Court is expected to rule as early as February on whether Trump’s tariffs are legal. If the justices strike them down, trading partners could look for ways to escape their commitments.
White House spokesman Kush Desai responded to the skepticism. “President Trump agreed to lower tariffs on countries we have trade deals with in exchange for investment commitments and other concessions,” Desai said. “The president reserves the right to revisit tariff rates if other countries renege on their commitments, and anyone who doubts President Trump’s willingness to put his money where his mouth is should ask Nicolas Maduro and Iran for their thoughts.”
Still, the Trump administration can turn to alternative tariffs if the justices rule the current tariffs illegal.
Diverging from the Biden playbook
The Peterson researchers found similarities between Trump’s approach and Biden-era industrial policy. Both administrations aimed to encourage more manufacturing in the United States. But Biden used taxpayer dollars to finance infrastructure projects and incentives for companies to invest in green technology and semiconductors. Trump is using the tariff threat to get foreign countries and their companies to pick up the tab. And he has dropped the push to encourage clean energy, focusing instead on promoting fossil fuels.
In their report, the Peterson researchers worry about how the investment decisions would get made and whether they would reflect sound economics. “This approach may yield real investments and jobs,” they write, “but it raises familiar industrial policy concerns: opaque project selection, weak accountability, and the risk that political criteria crowd out economic efficiency.”