BERLIN (Aug 16): 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.<\/p>\n
First-half direct investments plunged by nearly two-thirds year-on-year to \u20ac4.3 billion (US$5 billion), the lowest level since 2023, according to calculations by the German Economic Institute, or IW, seen by Reuters.<\/p>\n
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.<\/p>\n
“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.<\/p>\n
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.<\/p>\n
In a bid to avoid heavy duties on its exports to the US, for example, the European Union agreed a deal last year that included a US$600 billion investment pledge.<\/p>\n
In the five years before the Covid-19 pandemic, first-half investments by German companies in the US averaged \u20ac15.8 billion, the data showed, almost four times the 2026 level.<\/p>\n
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.<\/p>\n
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 \u2014 the balance of new investments and liquidations \u2013 remained below av\u2014erage.<\/p>\n
“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 US remains an attractive market overall.”<\/p>\n
However, companies were hesitant to commit new capital, she said.<\/p>\n
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