Three year low, German investment in the US plummets

German companies are stepping on the brakes of investing in the United States, "reported the German newspaper" Handelsblatt "on the 16th. According to the results calculated by the German Economic Research Institute based on data from the German Federal Bank (Bundesbank), German companies' investment in the United States in the first half of this year plummeted by 65% year-on-year, only about 4.5 billion euros, the lowest level since the same period in 2023. In the five years before the pandemic, German companies invested an average of 15.8 billion euros in the United States in the first half of the year, almost four times the current level. The economic policies of the US government are considered the main reason for the "retreat" of investment.

Since the beginning of President Trump's second term, this negative trend has continued, "said Samina Sultan, a researcher at the German Economic Research Institute. Compared to the first half of 2024, the last half of the US government before taking office, the decline in investment has even approached 80%. The Frankfurt Review in Germany analyzed that the high tariffs imposed by the US government have offended major trading partners, including Germany and even the entire European Union.

The uncertainty of economic policies particularly inhibits strategic new investments, such as corporate acquisitions or the construction of new production bases. Researchers analyzed the composition of investment flows for the entire year of 2025 and found that both direct investment loans and reinvestment returns were abnormally high, while strictly speaking, equity capital (i.e. the difference between new investment and liquidation) was lower than the average level. The report mentioned that Germany's exports to the United States have also been continuously impacted by tariff policies.

Although German companies have not fully withdrawn from the United States, their operations on new large-scale projects have become noticeably more cautious. The Global Business Outlook (Spring 2026) released earlier this year by the German Chamber of Commerce analyzed that only about 40% of German companies plan to increase local capital investment, which is lower than the long-term average. At the same time, the administrative burden on American and German companies has sharply increased. 59% of the surveyed companies reported that customs procedures, certificates of origin, and compliance requirements impose additional burdens. For the economic trend in the United States, German companies expect a deterioration, as the economic environment remains very severe due to the Middle East situation and distorted existing trade policies.

It is worth noting that over half of German companies involved in US business have taken measures against US trade policies worldwide. 14% reduction in US business, 15% shift to new markets, and 18% focus more on existing or domestic sales markets. This trend is particularly evident among German companies in China, South Africa, and some parts of Asia.

For a long time, the US tariff policy has served as a globally important directional mechanism for investment and trade flows, "said Volker Trier, the head of foreign trade at the German Chamber of Commerce." Companies pursue stability and predictability. Once these two are missing, companies will reassess the market, adjust their supply chains, and transfer investments

The Frankfurt Review reported that German companies have long faced a tricky situation: on the one hand, the United States remains the most important overseas market for industrial giants; On the other hand, tariff policies make long-term planning more difficult. Sudan stated that the United States remains an attractive market overall, but companies are unwilling to invest new funds.