OCO Global | Remembering the 2025 Tariff Wars: What Capital Did Next

Early investment data suggest trade uncertainty is changing the scale and character of investment into the US, even as project numbers remain broadly stable.

Early 2025 already feels like a foreign country: familiar enough to recognise, strange enough to need explaining.

For a few months, tariffs were everywhere. Steel. Aluminium. Reciprocal tariffs. Trade deficits. And, of course, “Liberation Day”. Washington argued that exemptions had weakened domestic industry and left critical supply chains exposed. Europe warned of higher costs, disruption and retaliation.

In boardrooms, the question was less ideological. If the cost of serving the US market can change quickly, exemptions can disappear and supply chains are political again, does the current footprint still work?

Enough time has now passed to look beyond the immediate announcements. OCO Global reviewed investment activity from January 2022 to May 2026, comparing European greenfield FDI into the United States with domestic US expansion. We examined project numbers, capital investment, jobs, sector mix and manufacturing activity, alongside the language companies used to explain their decisions.

The projects got bigger

European companies announced 1,206 greenfield FDI projects in the US in 2025, broadly in line with the annual average for 2022–23. The number of projects did not jump. The capital behind them did.

European FDI capital investment into the US reached $127.8 billion in 2025, compared with an annual average of around $57.4 billion in 2022–23. That is an increase of roughly 123%. Jobs linked to those projects rose by approximately 35%.

Domestic US expansion followed a similar pattern. Companies announced fewer projects in 2025 than during the baseline period, while capital investment was around 99% higher.

A small sales office tests demand. A billion-dollar manufacturing, R&D, energy or distribution project makes a longer-term bet on the market. In 2025, more companies made that kind of bet.

Tariffs did not determine every decision. Incentives, labour, energy, regulation, customers and technology all mattered. The scale of the commitments does suggest that companies placed greater value on capacity inside the US market once trade policy became less predictable.

Capital concentrated in strategic sectors

Sectors exposed to tariffs, supply-chain disruption or pressure to localise production saw the largest impact.

In 2025, selected tariff-exposed sectors accounted for around 30% of European FDI projects into the US, but approximately 75% of European FDI capital investment. The largest commitments were concentrated in pharmaceuticals, biotechnology, industrial equipment, renewable energy, electronics, machinery, metals, chemicals and food manufacturing.

Manufacturing provides the clearest example. Across the selected European sectors, manufacturing capital investment into the US rose from $21.1 billion in 2024 to $50.5 billion in 2025.

These are sectors where location affects market access, production continuity, customer proximity and the ability to respond when policy changes. Companies are putting more capital behind the parts of their footprint that protect those advantages.

How companies explain the decision

Most companies do not announce a new facility by saying, “We are doing this because of tariffs.” They talk about resilience, capacity, customers and long-term commitment.

Roche announced in April 2025 that it would invest $50 billion in the US over five years. The plan included new and expanded manufacturing and R&D sites, as well as a gene therapy manufacturing facility in Pennsylvania. CEO Thomas Schinecker described the programme as part of Roche’s “long-standing commitment to research, development and manufacturing in the US”.

AstraZeneca announced a $4.5 billion manufacturing facility in Virginia as part of a wider US investment plan, pointing to critical medicine manufacturing, health sovereignty and national security. Avangrid, part of Spain’s Iberdrola Group, announced a $20 billion US grid infrastructure plan, citing rising energy demand from manufacturing and data centres.

Each investment places capacity, capability or infrastructure closer to the market it is intended to serve. That reduces exposure to disruption while positioning the company for future US demand.

What this means for economic development organisations

The early evidence points to a change in the weight of investment rather than a surge in volume. European companies committed much more capital to decisions with long-term implications for production, research, energy and distribution.

Tariffs shape how companies assess market access, supply-chain control and the value of operating within the markets they serve.

For EDOs, it is most critical to identify companies whose operating assumptions are under pressure, understand the commercial trigger behind a possible investment and show how a location can remove a real constraint.

Compliments of OCO Global – a member of the EACCNY