German US investment hits three-year low

German companies slashed direct investments in the United States to a three-year low in the first half of 2026, according to data from Germany's central bank and calculations by the German Economic Institute (IW). First-half direct investments plunged by nearly two-thirds year-on-year to €4.3 billion ($5 billion), the lowest level since 2023, and nearly 80% below the same period in 2024. The decline continues a downward trend evident since the start of Donald Trump's second term in January 2025, driven by uncertainty over Trump administration tariff policies. The Trump administration has threatened most US trading partners with import tariffs to secure concessions. In response, the European Union agreed a deal last year including a $600 billion investment pledge to avoid heavy duties. IW researcher Samina Sultan noted that while companies already active in the US continue to reinvest profits there, they are hesitant to commit new capital. The report highlights that the US remains an attractive market overall, but new investment commitments have fallen sharply.