The increased production will not only cater for US demand but also be exported to the rest of the world. IBM pledged to invest US$150 billion in US manufacturing over five years, including in R&D.
The most consequential victory for the US arising from US President Donald Trump’s trade war is not increased tariff revenue or even the decline in trade deficits. It is the expected huge rise in private investments in the US. One, a key part of the trade deals with countries such as the European Union, Japan, South Korea and even Malaysia involves commitments for increased investments on US soil; and, two, investments by US companies to avoid paying the tariffs.
Case in point: Apple will invest US$600 billion ($768 billion) to expand its domestic supply chain ecosystem, including a US$500 million commitment to MP Materials, the only fully integrated rare earth producer in the US. Apple will buy the latter’s US-made rare earth magnets under a multi-year deal. The two companies will also work together on setting up a cutting-edge new rare earth recycling line in California as well as expand capacity at MP Materials’ existing Texas factory.
