German Companies Cut US Investment To Three-Year Low, Data Show

German companies slashed investments in the United States to a three-year low in the first half of 2026, as Trump ​administration policies fed uncertainty between the transatlantic trading partners.

First-half direct investments ‌plunged by nearly two-thirds year-on-year to €4.3 billion ($5 billion), the lowest level since 2023, according to calculations by the German Economic Institute, or IW, seen by Reuters.

Compared with the same ​period in 2024, that represents a drop of nearly 80%, said the ​report, which is based on data from Germany’s central bank.

“This ⁠continues the downward trend that has been evident since the start of ​Donald Trump’s second term in January 2025,” IW researcher Samina Sultan told Reuters.

Since ​returning to office, Trump has threatened most of the United States’ international trading partners with import tariffs in an attempt to secure concessions favourable to Washington.

In a bid to avoid ​heavy duties on its exports to the U.S., for example, the European Union ​agreed a deal last year that included a $600 billion investment pledge.

In the five years before ‌the ⁠COVID-19 pandemic, first-half investments by German companies in the U.S. averaged €15.8 billion, the data showed, almost four times the 2026 level.

That said, the 2020 to 2023 period was shaped by the “exceptional circumstance” of the pandemic, Sultan said, with some ​years marked by ​net investment outflows.

The ⁠researchers also examined the composition of investment flows over 2025 and found that both direct-investment loans and reinvested earnings ​were exceptionally high, while equity capital in the narrower sense – ​the balance ⁠of new investments and liquidations – remained below average.

“Companies that are already active in the United States are therefore continuing to reinvest the profits they earn there ⁠in the ​country,” Sultan said. “This suggests that the U.S. remains ​an attractive market overall.”

COURTESY: Reuters