German direct investment in the US falls to EUR 4.3bn, and the new money is going to Asia

German companies put EUR 4.3 billion (about USD 5 billion) of direct investment into the United States in the first half of 2026, the lowest first-half figure since 2023 ^[1][2]. Tariff uncertainty has stopped being a line in the risk section and started showing up in capital budgets.

The comparisons are steep. The figure is down by nearly two-thirds against the first half of 2025 and closer to 80% against the first half of 2024 ^[3][4]. Pre-pandemic first-half investment averaged around EUR 15.8 billion ^[5]. The source describes the current figure as roughly a third of that; the arithmetic is nearer 27% ^[6].

Back-solving the percentages is instructive. An 80% fall implies a first-half 2024 base of roughly EUR 21.5 billion ^[7], well above the pre-pandemic average, and a two-thirds fall implies about EUR 12 billion in the first half of 2025 ^[8]. So part of the drop is a return from an unusually high base. Only part. Even measured against the pre-pandemic norm, the flow has been cut by roughly three quarters.

The slide predates this year. From February to November 2025, German direct investment in the US totalled EUR 10.2 billion, against roughly EUR 19 billion in the comparable stretch a year earlier, a decline the source puts at 45% and which computes to about 46% ^[9][10][11]. The source dates the pullback to Donald Trump's return to the White House in January 2025 and the accompanying tariff threats and trade-policy unpredictability ^[12]. The data was analysed by the German Economic Institute (IW) and reported by Reuters ^[13]. IW researcher Samina Sultan said the reluctance has been persistent since Trump's election, which the source reads as structural rather than cyclical ^[14].

The composition of the decline matters more than the headline. Reinvestment of earnings from existing US operations has stayed relatively stable, meaning firms with factories, offices and supply chains already in place are maintaining them ^[15]. What has dried up is fresh equity: new projects, new facilities, new expansions ^[16]. Nearly 30% of projects have reportedly been postponed rather than cancelled ^[17]. That is the signature of option value being preserved. Sunk assets keep producing because leaving is expensive; new lines wait because the tariff schedule they would be underwriting is not knowable.

The destination question has an answer. Surveys conducted earlier in 2025 found many German companies pivoting attention toward Asia, particularly China ^[18]. Separately, the European Union's 2025 deal included a reported USD 600 billion European investment commitment, which the source frames as diversification away from dependence on any single trading relationship ^[19].

Two caveats on the numbers. The reported windows are inconsistent, with a February-to-November 2025 comparison sitting alongside half-year figures ^[9][1], so the trend is more reliable than the decimals. And the percentages and the base averages do not perfectly reconcile ^[6][7].

Watch three things. Whether reinvested earnings stay stable: that line is what separates a pause from an exit, and it is the single most load-bearing figure in the dataset ^[15]. Whether the postponed roughly 30% converts or quietly cancels ^[17]. And the second-half run rate: repeat the first half and 2026 lands near EUR 8.6 billion for the year ^[20], which would make a three-year low look like a new level rather than a trough.