Direct investment by German businesses into the US economy plunged to a three‑year low in the first half of 2026. The main cause of the large capital outflow was growing uncertainty in transatlantic trade provoked by the tariff policy of the Donald Trump administration.
According to calculations by the German Economic Institute (IW), based on Bundesbank statistics, the volume of direct investment from Germany fell by almost two‑thirds year‑on‑year, amounting to a modest €4.3 billion ($5 billion). This is the weakest first‑half result since 2023 and a drop of nearly 80% compared with the same period in 2024.
IW researcher Samina Sultan emphasizes that the sharp downward trend formed immediately after Trump’s return to the White House in January 2025. Repeated threats and the actual imposition of punitive tariffs in pursuit of trade concessions have deprived European companies of clarity about future costs and the rules of access to the US market.
Even the 2025 transatlantic agreement between Brussels and Washington — which envisaged mutual investment commitments of $600 billion in exchange for tariff rollbacks — failed to restore business confidence. German corporations are plainly reluctant to bring new capital into the US. For comparison, in the five years before the pandemic, the average first‑half investment volume stood at €15.8 billion, almost four times current levels.
Analysts note an interesting market paradox. German companies are anxious to avoid new external investments, yet they actively support already running US businesses. The flow of new investments remains below historical lows, while reinvested earnings on site are hitting record levels. Corporations still consider the US market extremely attractive, but amid political turbulence they prefer to expand only through locally earned funds.