German companies sharply reduced their investments in the United States in the first half of 2026, with uncertainty over trade and economic policies under President Donald Trump weighing on new capital commitments, Reuters reported.
Direct investment by German companies in the US fell nearly two-thirds from a year earlier to €4.3 billion ($5 billion), the lowest level since 2023, according to calculations by the German Economic Institute (IW) based on data from Germany’s central bank and seen by Reuters.
The figure was nearly 80% lower than investment recorded during the same period in 2024, highlighting a continued decline in German corporate investment in the US since Trump returned to office in January 2025.
Trump’s administration has used the threat of import tariffs against major trading partners to seek concessions on trade and investment. The uncertainty has raised concerns among companies about the future cost of doing business across the Atlantic.
The decline is particularly significant compared with the years before the COVID-19 pandemic. German companies invested an average of €15.8 billion in the US during the first halves of the five years before the pandemic, almost four times the level recorded in the first half of 2026.
The IW said investment data from 2020 to 2023 were affected by the exceptional circumstances surrounding the pandemic, with some years recording net investment outflows.
However, the weaker overall investment figures do not indicate that German companies are abandoning the US market. An analysis of investment flows in 2025 showed that direct-investment loans and reinvested earnings were unusually strong, while equity capital representing new investments and liquidations remained below average.
This suggests that German companies with established operations in the US are continuing to reinvest profits generated locally, indicating that the US remains an important and attractive market for businesses already present there.
At the same time, companies appear increasingly cautious about committing fresh capital to new projects, reflecting uncertainty over tariffs, trade policy and the broader direction of US economic policy.
The trend comes as the European Union seeks to limit the impact of US tariffs on its exporters. As part of an agreement reached with Washington last year, the EU committed to a $600 billion investment pledge in the United States, alongside other measures aimed at easing trade tensions.
For German businesses, the latest investment figures point to a growing distinction between maintaining and expanding existing US operations and making significant new investments. While companies continue to see opportunities in the world's largest economy, policy uncertainty is making them more reluctant to deploy fresh capital at the same pace as in previous years.
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