Red alarm level: German investments in the USA reach a low point!

Red alarm level: German investments in the USA reach a low point!

USA - The decline in German direct investments in the USA is alarming. In February and March 2025, these were only 265 million euros, which corresponds to a drastic decline of 18 times less than the average of 4.6 billion euros in 2010 to 2024. These figures, which were published by both the Deutsche Bundesbank and the Institute of German Economy (IW), signals a strong reluctance of German companies in the USA. Samina Sultan, foreign trade expert of the IW, interprets this development as worrying and indicates the uncertainty that caused the economic policy of the Trump administration in the companies. In 2024, the German economy invested 8.7 billion euros in the United States, but this year the entire sum of German direct investments decreased from 96 to 74 billion euros.

Behind this decline are the uncertainties due to the punitive tariffs introduced by Trump, which significantly impair the predictability and reliability of investments. The last comparative value of such a low level of investment dates from 1993 when Bill Clinton was president. However, the United States remains an important target country for German companies, especially in the industries, mechanical engineering as well as information and communication services. German subsidiaries in the United States employed a total of 923,600 people in 2021.

trade relationships and challenges

Germany was the fourth largest foreign direct investor in the USA in 2024, behind Japan, Canada and the United Kingdom. Despite the worrying investment figures, Germany exported in 2024 worth 161.4 billion euros to the United States, while the United States was worth 91.4 billion euros to Germany. Nevertheless, Trump expressed criticism of this unbalanced trade balance. Around 10 percent of German exports go to the United States, with mechanical engineering and chemical industry playing a central role.

The effects of the Trump government

Since Donald Trump took office on January 20, 2024, the investment activity of German companies in the USA has significantly deteriorated. In February and March of the same year, the investments were only 265 million euros, in a strong contrast to 4.6 billion euros in the comparison period of the previous year. Trump's economic policy led to uncertainty among companies and caused concerns about future tariffs that could affect production costs directly.

Nevertheless, some German carmakers, such as BMW and Audi, show a certain determination to expand their production capacities in the United States. These companies are in negotiations with the US administration regarding customs deals. Nevertheless, it is predicted that the general trend towards fewer investments will last, which presents the relationship between Germany and the USA with further challenges.

The trade relationships between the two countries are shaped by decades of bilateral relationships and include both economic and security -political aspects. The United States is the third largest trading partner in Germany, Mexico and Canada as well as China. It is also discussed whether a common free trade agreement (TTIP) between the EU and the United States will be realistic in the future. While the foreign trade with goods in Germany in 2023 was slightly declining, the trade balance with the USA remains shaped by immense surpluses.

Overall, the economy between Germany and the USA is currently at a critical point. The ongoing tensions and uncertainties could have long -term effects on the investment decisions of both countries.

For further information about German investments in the USA, see fre.de , taz.de and Statista .