Trump Policies Drive Down German Investment in US

In the first half of 2026, German companies reduced their direct investment in the United States to a three-year low. According to calculations by the German Economic Institute, investment fell by nearly two-thirds year-over-year to €4.3bn ($5bn).

Compared with the same period in 2024, this represents a decline of nearly 80%. By comparison, in the five years before the pandemic, German investment in the US averaged €15.8bn ($18.3bn) in the first half of the year.

The main reason for this caution is the uncertainty caused by the trade policy of President Donald Trump's administration, which, since his return to office in January of last year, has been threatening international partners with import tariffs. Although researchers at the German Economic Institute have noted a high proportion of reinvested profits among companies already operating in the US, the inflow of new capital overall is lagging significantly.

German companies are therefore avoiding new projects or expansion through acquisitions, even though the US market itself remains attractive to them. Last year's European Union agreement, intended to prevent high tariffs from derailing $600bn in investment commitments, has not yet eased the caution of German investors.

(Reuters, Max)