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German companies slashed their direct investments in the United States to a three-year low during the first half of 2026, driven by persistent trade policy uncertainty between transatlantic partners under the administration of U.S. President Donald Trump.

Foreign direct investment (FDI) from Germany to the U.S. dropped by approximately two-thirds year-on-year to €4.3 billion (~$5.0 billion) in H1 2026, marking the lowest semi-annual level recorded since 2023, according to calculations published by the German Economic Institute (IW) based on Deutsche Bundesbank data.

Compared to the corresponding period in 2024, the figures represent a steep decline of nearly 80%.

"This continues the downward trend that emerged since the beginning of Donald Trump's second presidential term in January 2025," said Samina Sultan, trade and economic policy researcher at the German Economic Institute (IW).

Investment Contraction Metrics

The table below highlights the magnitude of the investment contraction across recent comparative periods:

PeriodGerman FDI in the U.S.Comparative Variance

H1 2026€4.3 Billion (~$5.0 Billion)Lowest level recorded since 2023

vs. H1 2025Year-on-Year Change$\sim -66.7\%$ (Down by two-thirds)

vs. H1 2024Two-Year Change$\sim -80.0\%$ plunge

Transatlantic Trade Friction and Tariff Pressures

Since taking office for a second term, President Trump has repeatedly threatened major U.S. trading partners with sweeping import tariffs in an effort to extract economic and trade concessions favorable to Washington.

In a strategic attempt to shield European exports from prohibitive U.S. tariff barriers, the European Union finalized an agreement last year that included commitments for roughly $600 billion in investments across the U.S. economy. Despite those high-level commitments, corporate risk aversion and lingering regulatory friction continue to weigh heavily on private corporate capital deployment from Europe’s largest economy.