Donald Trump was very deliberate when he declared during his inauguration speech that “the golden age of America begins right now.” Many would wonder what he meant by that statement, given that the United States has been the most dominant economy in the world over the past century and has led the world in terms of technology and innovations that have shaped our modern world.
However, over the past few decades, the growth of the American economy has slowed down while that of China which was a third-world country only a few decades ago has been growing at a phenomenal rate and now threatens to upstage America as the world’s biggest economy.
Ironically, America played a major role in China’s rapid growth as at a point in time China depended on America as a market for almost 50% of their export trade while the remaining 50% went to the rest of the world. While the ratios have changed in recent times, as much as 17% of China’s exports still end up in America.
While the American market was open to the Chinese, the Chinese government did not return the favour as they resorted to all sorts of legal and underhand tactics to protect their markets from foreign companies and this may perhaps be the main reason why Donald Trump decided to single out China for increased tariffs during his first term in office.
More importantly, apart from the perceived Chinese rivalry, Donald Trump realized that America had grown so big that it had gotten lackadaisical about growing its economy and many economic opportunities were lost to other countries due to this attitude. The stagnating American economy and the threat of China upstaging the United States were perhaps the two most dominant reasons that informed President Donald Trump’s aggressive economic growth policies that promise to be the hallmark of his second term in office.
The Trump administration is making waves with its efforts to attract massive investments to America, and the implications for the US economy are significant. In a recent speech at the World Economic Forum, President Trump highlighted the administration’s achievements in reversing the economic chaos inherited from the previous administration.
One of the most notable investments is the $500 billion investment in AI infrastructure by Oracle, SoftBank, and OpenAI. This massive investment is expected to create hundreds of thousands of jobs and establish the US as a leader in AI technology. Additionally, Saudi Arabia has announced plans to invest at least $600 billion in the US, with President Trump encouraging them to round it out to $1 trillion.
Mark Zuckerberg, CEO of Meta, which owns social media giants like Facebook, Instagram, WhatsApp, and Threads, has also announced that his company will invest between $60 and $65 billion in capital expenditures to upgrade its AI infrastructure before the end of the year.
With $1.165 trillion worth of new investments announced within the first week of his inauguration, it is becoming evident that Trump’s economic policies are a magnet for Mega-Investments but Trump is not yet done as he turned his searchlights on the neighbouring countries of Canada and Mexico by threatening them with higher tariffs while asking companies that wanted to avoid paying higher tariffs to set up shop in America which could potentially bring more investments into the country.
These investments are a testament to the Trump administration’s business-friendly policies and its efforts to create a favourable environment for investment. The administration’s focus on deregulation, tax cuts, and promoting American energy independence is expected to have a positive impact on the US economy.
The implications of these investments are far-reaching. They are expected to create new jobs, stimulate economic growth, and establish the US as a leader in cutting-edge technologies like AI. The increased investment in the US is also expected to lead to higher tax revenues, which can be used to pay down the national debt and fund public programs.
Overall, the Trump administration’s efforts to attract investment to America are paying off, and the implications for the US economy are overwhelmingly positive. As President Trump stated, “America is back and open for business”.
Oshobi, A development economist, management consultant, and author writes from Lagos, Nigeria.