Report Reveals German Investments in US Nearly Halved During Trump’s First Year Back
The latest report from the German Economic Institute (IW) reveals a significant decline in German investments in the United States. During President Donald Trump’s second term, investments dropped sharply, highlighting growing concerns over trade uncertainties.
Key Findings on German Investments in the U.S.
From February to November 2025, German companies invested approximately 10.2 billion euros (around $11.1 billion) in the United States. This represents a staggering 45% decrease compared to the previous year, when investments neared 19 billion euros. This data is reflective of trends highlighted by the IW study, which referenced information from the Bundesbank.
- 2025 investment: 10.2 billion euros
- 2024 investment: nearly 19 billion euros
- Average investment from 2015-2024: 13.4 billion euros
Moreover, the analysis indicated a reduction of over 24% in investment compared to the average figures from earlier years within the 2015-2024 period.
Decline in Exports
In addition to falling investments, German exports to the U.S. faced an 8.6% decrease between February and October 2025. This decline marks the largest since 2010, excluding the period impacted by COVID-19. IW attributes this dip not only to Trump’s tariffs but also to the depreciation of the dollar, which has added to the complexities of U.S.-Germany trade relations.
Impact of Trade Policies
The report emphasizes that the uncertainty surrounding U.S. trade policy, particularly under Trump, has caused German firms to adopt a cautious strategy. As specific tariffs have been intimated or implemented, companies have hesitated to expand operations or make significant investments. This wait-and-see approach stems from a fear that sudden policy changes could destabilize their assessments.
Sector-Specific Performance
Data from the IW study points to notable declines in specific export sectors:
- Automobiles and parts: down nearly 19%
- Machinery: down 10%
- Chemical products: down more than 10%
As noted in the report, these export challenges are detrimental not only for Germany but also for the U.S. economy. Tariffs have increased costs for American producers, sustaining inflation levels above 2%.
Overall, the report reflects deepening trade tensions and highlights the ongoing strategy recalibrations by German companies amidst evolving economic conditions under Trump’s administration.
