Lucrative new tax breaks and other incentives for advanced manufacturing that President Biden signed into law appear to be reshaping direct foreign investment in the American economy, according to a White House analysis, with a much greater share of spending on new and expanded businesses shifting toward the factory sector.
Data that include the first months after the enactment of two pieces of that agenda show that a key measure of foreign investment fell slightly from 2021 to 2022, adjusted for inflation.
The numbers suggest that, in the early months after the bills were signed, the hundreds of billions of taxpayer dollars that Mr. Biden is directing toward manufacturing have not increased the overall amount of foreign direct investment in the economy.
Instead, the laws appear to have shifted where foreign investment is being directed.
A new analysis by the White House Council of Economic Advisers shows the composition of what’s known as capacity-enhancing spending on new structures or expansions of existing ones shifted rapidly toward factories, in line with one of Mr. Biden’s top economic goals.
Persons:
Biden
Organizations:
White House Council, Economic Advisers