German Direct Investment in the United States Fell to 4.3 Billion Euros, Down Nearly 80 Percent From 2024
German companies invested 4.3 billion euros directly in the United States in the first half of 2026, the lowest level since 2023, according to calculations by the German Economic Institute reported by Reuters on 16 August. The figure is down by nearly two thirds from the same period a year earlier and by nearly 80 percent against the first half of 2024. The institute’s calculations are based on data from the Bundesbank. The institute has not published the report.
The scale is easier to read against the pre-pandemic norm. Reuters reports that in the five years before the pandemic, German companies’ first-half investment in the United States averaged 15.8 billion euros. The 2026 figure is roughly a quarter of that average.
The composition matters more than the total, and it points the other way. The institute examined the make-up of the flows across 2025 and found that direct investment loans and reinvested earnings were exceptionally high, while equity capital in the narrower sense, meaning the balance of new investments against liquidations, remained below average. IW researcher Samina Sultan told Reuters that companies already operating in the United States are continuing to reinvest the profits they earn there, which she said suggests the country remains an attractive market overall, while companies are hesitant to commit new capital.
That is a specific finding rather than a general retreat. In aggregate, German earnings generated in the United States are staying in the United States. What has slowed is the decision to put fresh equity behind new positions. Aggregate flows cannot show whether individual companies are divesting, and the data does not speak to that.
The timing is attributed to policy uncertainty. Sultan described the fall as a continuation of a downward trend evident since the start of the current US administration in January 2025.
What the 600 billion dollar figure is, and what it is not. The European Commission’s joint statement on the EU and US trade framework says European companies are expected to invest an additional 600 billion dollars across strategic sectors in the United States through 2028. It is an expectation about private company behaviour across the whole European Union over roughly three years, not a government commitment and not a bilateral German number. The distinction that matters is one of kind: the 4.3 billion euro figure is an observed historical flow, calculated by IW from Bundesbank data and reported by Reuters, whereas the 600 billion dollar figure is a forward-looking expectation.
How this fits the trade leg. German exports hit a record in June while shipments to the United States fell, and the Bundesbank has put the average US import tariff at almost 12 percent. The trade and investment indicators are therefore moving in the same direction, although the data do not establish a common cause.
Why it matters: The signal is composition, not the headline. A collapse in new equity commitments alongside high reinvested earnings describes companies that remain committed to the market they are already in and unwilling to enlarge their position in it. Those two behaviours have very different implications for how quickly the flow recovers, and new commitments could respond more quickly than the existing investment stock if policy uncertainty recedes. It also means the headline number overstates disengagement: the capital already deployed is still working.
Outlook: The comparison base is awkward and the institute says so. The 2020 to 2023 period was shaped by what Sultan called the exceptional circumstance of the pandemic, with some years marked by net investment outflows, so comparisons across that window carry less information than the gap against the pre-pandemic five-year average. The Bundesbank data underlying the calculation is published on a lag, and the first clean test of whether this is a floor or a trend arrives with the second-half figures.
Sources: Reuters, reporting calculations by the German Economic Institute (IW) based on Bundesbank data, 16 August 2026. The IW report is not publicly available. European Commission, Joint Statement on a United States and European Union framework on an agreement on reciprocal, fair and balanced trade.
