German companies cut US investment to three-year low, data show

BERLIN, Aug 16 - German companies significantly reduced their investments in the United States during the first half of 2026, reaching a three-year low, according to data from the German Economic Institute. The direct investments dropped by nearly two-thirds year-on-year to €4.3 billion, the lowest level since 2023. This represents an 80% decrease compared to the same period in 2024, as reported by IW researcher Samina Sultan.

The downward trend began with the start of Donald Trump's second term in January 2025. Trump's administration has imposed threats of import tariffs on various international trading partners to secure favorable concessions. In response, the European Union agreed to a $600 billion investment pledge last year. Prior to the COVID-19 pandemic, German companies' first-half investments in the U.S. averaged €15.8 billion, nearly four times the current level.

However, the 2020-2023 period was influenced by the pandemic, with some years showing net investment outflows. The researchers also observed that direct-investment loans and reinvested earnings were exceptionally high in 2025, while equity capital remained below average. Companies operating in the U.S. are continuing to reinvest their profits in the country, indicating that it remains an attractive market. However, there is reluctance among companies to commit new capital.