German investment in the U.S. drops sharply amid tariff uncertainty

German companies have significantly reduced their investments in the United States during the first half of 2026, marking a three-year low. According to data from the German Economic Institute (IW), direct investments fell by nearly 80% compared to the same period in 2024, totaling approximately 4.3 billion euros.

This decline is attributed to heightened economic uncertainty regarding the trade policies of the Donald Trump administration. Since the start of his second term in January 2025, the U.S. government has utilized threats of import tariffs to negotiate concessions from trading partners. While the European Union previously reached a $600 billion investment commitment to mitigate tariff risks, regulatory instability continues to deter new capital expansion.

Research indicates that while established companies continue to operate and reinvest profits within the U.S., the willingness to commit new equity has diminished. This trend contrasts sharply with the pre-pandemic era (2015–2019), when average investments during the first half of the year were approximately 15.8 billion euros.