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

By Rene Wagner

BERLIN, Aug 16 (Reuters) - ‌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.

First-half direct investments plunged by nearly two-thirds year-on-year ⁠to €4.3 billion ($5 billion), the lowest level since 2023, according to calculations by the German Economic ‌Institute, or IW, seen by ‌Reuters.

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.

"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.

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.

In a bid to avoid heavy duties on its exports ​to the U.S., for example, the European ‌Union agreed a deal last year that included a $600 billion investment pledge.

In the five years before the COVID-19 pandemic, first-half ⁠investments by German companies in the U.S. averaged €15.8 billion, the data showed, almost four times the 2026 level.

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.

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 – the ‌balance of new investments and liquidations – remained below average.

"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 U.S. remains an attractive ‌market overall."

However, companies were ​hesitant to commit new capital, she said.

($1 = 0.8645 euros)

(Reporting by Rene Wagner; Writing by Christoph Steitz and Linda Pasquini; Editing by ‌Joe Bavier)

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