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

BERLIN: German firms reduced their investments in the United States to a three-year low in the first half of 2026, according to data released by the German Economic Institute, or IW. The figures, calculated by the institute, show a sharp decline of nearly two-thirds compared to the same period in 2025. The investments dropped to €4.3 billion ($5 billion), the lowest level since 2023, representing an 80% decrease from the same period in 2024, said the report.

This downward trend began under the Trump administration in January 2025, said IW researcher Samina Sultan. Trump's administration has been threatening import tariffs on various international trading partners to secure favorable concessions. In response, the European Union agreed to a deal last year, pledging $600 billion in investments.

Prior to the COVID-19 pandemic, German companies invested an average of €15.8 billion in the U.S. each first half, nearly four times the current level. Despite the current low, the 2020 to 2023 period was marked by "exceptional circumstances" due to the pandemic, with some years experiencing net investment outflows. The researchers also noted that in 2025, both direct-investment loans and reinvested earnings were exceptionally high, while equity capital remained below average.

This suggests that companies already operating in the U.S. are continuing to reinvest their profits in the country, indicating that the U.S. remains an attractive market overall.