At the beginning of his second presidency, Donald Trump's imposition of tariffs was met with widespread skepticism. Critics warned of economic decline and a worldwide backlash. But the present situation within the United States paints a more complex picture.
Less than a 12 months into his second term, the White House claims Trump is bring back production to the USA. It can also be announced that Trump has secured trillions of dollars in foreign direct investment (FDI). In 2025 alone. However, others consider that these commitments will amount to as much as 100% only a fraction of that.
So what’s the actual picture? Much of this foreign direct investment flows to the USA emerging semiconductor sector. These foreign investments actually represent a big reversal from the trend of American capital leaving after 1991, when U.S. corporations rushed to establish factories in countries where production was cheaper.
And the rise is supported by $300 billion (£225 billion) in capital investment commitments from Tech giants like Amazon, Microsoft, Alphabet and Meta. These investments reflect each Trump's aggressive diplomacy and his close relationship with Silicon Valley's tech elite.
Despite concerns a few tech bubble, these investments signal a deepening public-private partnership and a realignment of priorities to remain ahead in the worldwide AI race.
At the center of this strategy is the redesign of world supply chains. At a conference of enterprise capitalists in March, the US Vice President said JD Vance criticized US corporations due to their dependence on low-cost labor abroad. He warned of the risks of losing the US technological lead, particularly to China.
The solution, Vance and Trump argue, is to bring investment and jobs home. But can this logic, supported by massive domestic and foreign investment, be translated into the form of reshoring (when operations previously moved abroad are brought back into the country) that creates good jobs?
In our latest book Capitalist Value Chains, Christin Bernhold and I argue that global supply chains have enabled labor exploitation Environmental destruction worse. The efforts of each former President Joe Biden and Trump to contain the rise of China reflect not a retreat from globalization but a strategic reconfiguration of supply chains.
In the early days of globalization, American governments supported China's emergence because the world's workshop and exporter of low-cost consumer goods to the United States. But over the past 15 years, the U.S. has increased its efforts to curb China's technological rise while continuing to depend on its low-cost imports.
Trump's tariffs against China represent a turning point. US strategy now appears to have shifted from slowing China's advance to attempting to inflict severe economic damage on the Chinese economy to realize this reduce to a subordinate and never to a rival trading partner.
So will these investments create quality jobs? And what are the implications for the environment? The likely answers are probably not and possibly terrible.
Reshoring doesn’t mean abandoning global supply chains. Recently, Trump threatened sweeping tariffs against China in response to its restrictions on rare earth exports. Western industries – particularly the automotive and defense industries – warned that there may very well be an escalation Disrupting supply chains. US chip-dependent sectors similar to electronics, defense and telecommunications still rely heavily on Chinese rare earths.
Even if the US succeeds in transforming supply chains, it isn’t any guarantee that good jobs can be created. Despite Trump's pro-worker rhetoric, his administration's actions tell a distinct story.
In March 2025, Elon Musk's government efficiency department was fired 216,000 federal employees. The right to collective bargaining was taken away 400,000 employees in agencies similar to Veterans Affairs, the Environmental Protection Agency and the Transportation Security Administration. The White House also repealed the $15 an hour minimum wage requirement publicly financed corporations.
Pain for US employees
Traditional sectors are suffering. Since April, the machinery giant John Deere has cut greater than 2,000 jobs Cost increases Trump's tariffs are guilty. The big three automakers – Ford, GM and Stellantis – claim the tariffs will cost them $7 billion in lost profits in 2025, with serious consequences for Pay and jobs.
Will the tech sector's massive capital spending offset these losses? Most of the $300 billion pledged by corporations like Apple and Amazon is earmarked for AI infrastructure: powerful data centers, custom chips, graphics processing units and cloud networks.
These are capital intensive projects that create short-term jobs in the development industry, but offer little with a view to long-term employment.
At the identical time, tech corporations are downsizing by making replacements AI for human work. Microsoft announced layoffs of 6,000 and 9,000 employees, respectively, out of 228,000 employees worldwide in May and July 2025, including 800 in Washington, Microsoft's home state.
And what in regards to the quality of the remaining jobs? On AmazonFor example, the corporate's software developers have described how they use AI to scale back jobs and speed up work. Reports suggest that tasks that when took weeks can now be accomplished in a matter of days. One engineer told reporters that the scale of his team had been halved but was expected to supply the identical amount of code using AI tools.
The environmental costs of AI are rising. Researchers have found that data centers are already consuming 4.4% of US electricity. By 2028, AI could require as much electricity as 22% of American households use annually.
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This surge in demand, combined with cuts to the federal budget for green energy initiatives, is resulting in a decline in using renewable energy broader decarbonization efforts similar to hydrogen technology projects, battery factories and power grid upgrades.
These numbers will only increase if the rise continues. According to the International Energy Agency, fossil fuels – particularly coal and natural gas – are expected to supply supply greater than 40% the extra electricity demand of knowledge centers by 2030.
Trump's push toward AI, coupled along with his tariff system and his alliance with Silicon Valley's elite, could reshape the economy and global supply chains — but not for the advantage of employees or the planet. The promise of revitalizing manufacturing and job creation masks deeper risks: automation, weakened labor protections and escalating environmental damage.
