In the first half of 2026, German firms reduced their investments in the United States to a three-year minimum, as policies from the Trump administration created uncertainty for the transatlantic trading partners.
Direct investments in the first half fell by almost two-thirds compared to last year, reaching €4.3 billion ($5 billion), marking the lowest point since 2023, as per calculations from the German Economic Institute, or IW,as per reports.
The report, based on information from Germany's central bank, stated that this indicates a decline of almost 80% compared to the same timeframe in 2024.
"This persists the decline that has been clear since Donald Trump's second term began in January 2025," says IW researcher Samina Sultan.
Since his return to office, Trump has warned nearly all of the United States' global trading allies with import tariffs to obtain concessions that benefit Washington. To dodge substantial tariffs on its exports to the US, for instance, the European Union struck a deal last year that featured a $600 billion investment commitment.
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In the five years leading up to the COVID-19 pandemic, first-half investments by German firms in the US averaged €15.8 billion, the data indicated, nearly four times the level of 2026.
Sultan remarked that the years from 2020 to 2023 were influenced by the pandemic's "exceptional circumstance," resulting in certain years having net investment outflows.
The researchers additionally analyzed the makeup of investment flows throughout 2025 and discovered that both direct-investment loans and reinvested earnings were remarkably high, whereas equity capital in a stricter sense—the difference between new investments and liquidations—stayed below average.
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"Businesses already operating in the United States are thus reinvesting their profits back into the country. This indicates that the US continues to be a desirable market overall," Sultan says.
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Nonetheless, she mentioned that businesses were reluctant to invest additional funds.