Trump's policy uncertainty drags down German companies' investment in the US by nearly two-thirds in the first half of the year

(1) According to calculations by the German Institute for Economic Research based on central bank data, in the first half of 2026, direct investment by German companies in the United States dropped nearly two-thirds year-on-year to 4.3 billion euros (approximately 5 billion US dollars), the lowest level since 2023; compared to the same period in 2024, the decline is close to 80%. (2) Since Trump began his second term in January 2025, he has continued to threaten increased import tariffs on trade partners to secure advantageous concessions, and this heightened uncertainty is the main reason for the sharp drop in investment; during the five years before the pandemic, average investment in the same period was 15.8 billion euros, about four times the current level. (3) However, the investment structure shows that reinvested earnings and scale of direct investment loans remain high, while the net amount of new equity capital is below average. This indicates that companies already operating in the US are still reinvesting local profits in the United States, demonstrating the continued attractiveness of the US market, but companies remain cautious about new capital investment.