Key facts
- German companies' direct investments in the US reached a three-year low of €4.3 billion in H1 2026.
- This represents a nearly two-thirds year-on-year decrease and an 80% drop compared to H1 2024.
- The decline is attributed to uncertainty stemming from Donald Trump's administration policies and tariff threats.
- Companies are reinvesting profits in the US but are hesitant to commit new capital.
- Average first-half investments from 2015-2019 were €15.8 billion, nearly four times the 2026 level.
German companies significantly reduced their investments in the United States during the first half of 2026, reaching a three-year low. Direct investments plummeted by nearly two-thirds year-on-year to €4.3 billion ($5 billion), according to calculations by the German Economic Institute (IW).
This marks the lowest level since 2023 and represents a drop of almost 80% compared to the same period in 2024. IW researcher Samina Sultan noted that this continues a downward trend observed since the beginning of Donald Trump's second term in January 2025. Trump's administration has frequently threatened international trading partners with import tariffs to secure favorable concessions for Washington.
In an effort to avoid substantial duties on its exports to the U.S., the European Union agreed to a deal last year that included a $600 billion investment pledge. Prior to the COVID-19 pandemic, during the five years leading up to it, German companies' first-half investments in the U.S. averaged €15.8 billion, nearly four times the 2026 level.
Sultan also pointed out that while companies already operating in the U.S. are reinvesting their profits there, suggesting the market remains attractive overall, they are hesitant to commit new capital. The period between 2020 and 2023 was influenced by the pandemic, with some years showing net investment outflows.