German companies cut direct investment in the US to a three-year low
MacroGeopolitics
German companies cut their direct investment in the United States by almost two-thirds in the first half of 2026 compared with the same period a year earlier, leaving it at 4.3 billion euros, the lowest level in three years, amid uncertainty over the trade policies of US President Donald Trump. The German Economic Institute, citing data from Germany's central bank, said investment by German companies in the first six months fell by almost 65 percent compared with 2025 and by almost 80 percent compared with 2024. The trend reflects rising uncertainty between the two countries. Since returning to office, Trump has pressed several trading partners with import tariffs in exchange for trade terms more favourable to the United States, including the European Union, which reached a trade deal with the US by pledging to invest 600 billion dollars in the United States to avoid higher tariffs. The data also show that in the first half of 2026, German companies' investment in the US was almost four times lower than in the five years before Covid, when average investment reached 15.8 billion euros. However, researchers noted that the years 2020 to 2023 were an unusual situation because of the pandemic, with some years seeing more capital flow out of the US than into it. At the same time, a closer look at the structure of investment in 2025 shows that most of the money was intercompany loans and reinvested earnings, while fresh capital remained below normal averages. The data suggest that German companies already operating in the US are still reinvesting profits earned in America, showing that the US market overall remains attractive, but companies are still hesitant to move new capital into the country for now.
