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

German corporations slashed their investments in the United States to a three-year low in the first half of 2026, according to data analyzed by the German Economic Institute. Direct investments fell nearly two-thirds year-on-year to €4.3 billion, a sharp decline of around 80% compared to the same period in 2024, reported Reuters.

This downward trend has been ongoing since Donald Trump's second term began in January 2025, with the researcher noting that Trump's policies have created uncertainty between the two trading partners. Trump has threatened various countries with import tariffs to secure favorable concessions. To counteract this, the EU made a deal last year that pledged $600 billion in investments.

Before the COVID-19 pandemic, German companies had invested an average of €15.8 billion in the U.S. annually over the five years prior. However, the 2020 to 2023 period was impacted by the pandemic, with some years showing net investment outflows. The study also found that both direct-investment loans and reinvested earnings were exceptionally high during 2025, while equity capital remained below average.

This suggests that U.S. companies are continuing to reinvest their profits in the country, indicating that it remains an attractive market. However, companies are hesitant to commit new capital, according to the report.