- Foreign direct investment in the United States (FDIUS)2 totaled $52.8 billion in the firstquarter
of 2025, a 34 percent decrease over the fourth-quarter 2024. - Net equity flows registered $19 billion in first-quarter 2025, composing 36 percent of
FDIUS. - Reinvestment of earnings stood at $40 billion in the first-quarter of 2025, accounting
for some 75 percent of FDIUS. - Foreign direct investment in the United States in 2024 was revised down to $292
billion, making it a weaker than average year for FDIUS over the past decade. - Quarterly FDIUS flows are subject to large revisions and can fluctuate greatly from
quarter to quarter. - Despite increased global competition for foreign investment dollars as more countries
position themselves as open and attractive investment destinations, the United States
remains a prime investment market attracting capital and businesses to the United
States that create new jobs across the American economy, bolster American innovation,
and enhance American’s global competitiveness.
Analysis & Context
First-quarter 2025 foreign direct investment flows in the United States totaled $52.8 billion,
making it the second-weakest quarter since 2022. FDIUS flows were revised down to $292 billion in 2024, or $5 billion lower than 2023. Reinvested earnings in 2024 made up the largest portion
of FDIUS at nearly 70 percent of total FDIUS.
In 2024, Japan, Canada, and the Netherlands were the top investors in the United States, each investing at least $37 billion. Germany and the United Kingdom completed the list of the top five investors in FDIUS flows.
Manufacturing led in FDIUS flows in 2024 at $110 billion, followed by wholesale trade and
information, at $47 billion and $22 billion, respectively. Transportation equipment was the largest manufacturing segment by FDIUS at $24 billion. Conversely, there was a $5.5 billion divestment in transportation equipment in the first-quarter 2025 as well as a $1.7 billion divestment in computers and electronic products.
After accounting for European ‘conduit’ countries (Ireland, Luxembourg, the Netherlands,
Switzerland, the United Kingdom because these countries’ FDI flows are greatly impacted by
conduit flows), FDI flows were down by 11 percent in 2024, according to the United Nations Conference on Trade and Development (UNCTAD) World Investment Report (WIR) 2025.UNCTAD notes that “trade tensions have led to downward revisions of most indicators of FDI prospects.”
Looking at foreign direct investment more broadly, international companies invest in the United States for many reasons. A list of positive factors includes the large U.S. market, world-class research universities, a stable regulatory regime, and a solid infrastructure that allows businesses to easily access the U.S. market. For certain international investors, the United States has become an important global export platform. Good domestic energy resources also draw international investors to the United States.
These investments benefit the American economy as international firms build new factories across the United States, buoy their well-established U.S. operations, fund American research and development activities, and employ 8.4 million Americans in well-paying jobs.
The United States was the top destination for both greenfield projects and international project finance deals in 2024. The United States also remained the world’s top recipient of foreign direct investment flows last year, accounting for almost one-fifth of the global total, followed by Singapore, Hong Kong, and China.
Whether the United States will retain its status as the world’s most attractive investment location hinges on macroeconomic policy decisions, both in the United States and abroad. But for the 13th consecutive year, A.T. Kearney ranked the United States as number one in its recently released 2025 Foreign Direct Investment Confidence Index, followed by Canada and the United Kingdom.