Joe Biden’s record as the 46th US president is chequered. His pledge to ‘save democracy’ by allowing his Democrat ally Kamala Harris to run in the 2024 election against their political rival, Republican Donald Trump, fell short when Ms Harris lost. With Mr Trump set to be inaugurated and resume power on January 20, the legacy of octogenarian Biden is in the spotlight.

The Biden-Harris administration inaugurated a new era of industrial policy, while furthering the country’s protectionist approach to trade and investment that Mr Trump shaped during his first term: if not in form, certainly in substance. 

Here are five charts to make sense of President Biden’s impact on FDI, providing hard facts to separate the hype from reality.

How did Biden’s policies affect inbound FDI to the US?

Mr Biden’s ‘Investing in America’ agenda aimed to make a ‘once-in-a-generation investment’ in US infrastructure and supply chains for high-tech and clean energy industries. Industrial policies — including the Bipartisan Infrastructure Law, Chips and Science Act (CSA) and the Inflation Reduction Act (IRA) — offered unprecedented subsidies and created a frenzy among investors.

Foreign greenfield investment announcements in the US surged in the first three years of Mr Biden’s term to almost $410bn, far greater than the $263bn in the same period of Mr Trump’s first term, according to fDi Markets. But many of these FDI commitments were attempts by businesses to secure public money and never materialised. 

Total FDI inflows to the US, which includes both greenfield and cross-border M&A, hit their highest level since 2016 in the first year (2021) of Mr Biden’s term but then declined in the two following years, according to data from the Bureau of Economic Analysis, OECD and Unctad. In 2023, FDI inflows to the US topped $270bn, higher than in any year of Mr Trump’s term except 2017.

However, BEA data on planned total expenditure from new FDI to acquire, establish or expand US businesses stood at $852bn in Mr Biden’s first three years, lower than $873bn in the same period of Mr Trump’s first term.

How many jobs were created by FDI during Mr Biden’s term? 

US presidents are expected to create better economic opportunities for Americans, often through policies to encourage both domestic and foreign investment. Indeed, FDI business activity alone supports nearly 8 million direct jobs in the US, according to the US Department of Commerce.

The Biden-Harris administration claimed in November 2024 that a total of 16 million jobs were created under its leadership. However, a closer look at the greenfield FDI employment data reveals a gap between hype and reality.

Planned employment in 2023 from US inbound greenfield FDI — once full operations begin in newly established and expanded US businesses — rose to a decade-high of 51,300 direct jobs, 78% of which were in manufacturing, according to official BEA data. But this is less than half the 129,400 planned direct jobs from announced greenfield FDI, according to fDi Markets, which includes estimates when investing companies do not disclose job figures. 

Did US outbound FDI change in Mr Biden’s presidential term?

The US has been the world’s largest source of greenfield FDI for years, both in terms of project numbers and capital expenditure (capex). But in Mr Biden’s term this shifted, as US firms focused more on opportunities at home, coinciding with greater restrictions on US outbound investment and policies like the IRA and CSA that encouraged investment in the US.

Around 14% of the $1.34tn of global announced greenfield FDI capex in 2023 was announced by US-headquartered companies, down from a peak of almost 30% in 2021 and the lowest proportion since records began, according to fDi Markets. Meanwhile, China’s share as a source of global FDI capex jumped to almost 12% in 2023, just short of the 13% record in 2016.  

Did Mr Biden create a new era of ‘friendshoring’?

Mr Biden’s FDI legacy will forever be marked by a push towards boosting supply chain resilience and ‘friendshoring’, or the encouragement of trade and FDI between like-minded countries amid geopolitical tensions. Janet Yellen, Mr Biden’s treasury secretary, embodied this “favouring of friendshoring” in April 2022, when she said “let’s build on and deepen economic integration .. with the countries we know we can count on”.

Greenfield FDI has increasingly flowed between geographically aligned countries, notably increasing within the western (US-aligned) bloc during Mr Biden’s term, according to a 2024 ECB analysis. Data from fDi Markets show greenfield investment by companies based in OECD countries declined in China. At the same time, Chinese companies increased their greenfield investment plans in some OECD countries, notably Mexico, which has been accused of becoming a back door for Chinese goods into the US market.

Why did Mr Biden shift the US approach to monitoring FDI?

Under Mr Biden, the US increased its protectionist approach to FDI, embodied by his decision to block Nippon Steel’s $14.9bn acquisition of US Steel on national security grounds. But the Biden-Harris administration not only increased its scrutiny of inbound FDI to the US, but also implemented the first outbound FDI screening mechanism that targets US investments in mainland China, Hong Kong and Macau in AI, microchips and quantum computing applications with dual-use applications.

Greater scrutiny on FDI into the US is demonstrated by notices of transactions filed with Cfius, the US FDI screening committee. Under Mr Biden between 2021 and 2023, Cfius investigated 421 FDI deals, marking a slight decline from the 443 transactions investigated in the same period of Mr Trump’s first term. Mr Biden’s FDI legacy will be one that is marked by an increasingly protectionist White House.

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