German companies' investments in the U.S. have dropped to a three-year low in the first ​half of 2026, as Trump administration policies continue to raise uncertainty and pose risk for trade between the key trans-Atlantic partners, data shows.

First-half ⁠direct investments plunged by ⁠nearly two-thirds year-over-year to 4.3 billion euros ($5 billion), the lowest level since 2023, according to calculations by the German Economic Institute (IW), seen by Reuters.

Compared with ​the ⁠same period in 2024, that represents a drop of nearly 80%, said the report, which is based on data from Germany's central bank.

"This continues the downward trend that has been evident since the start of Donald Trump's second term in January 2025," IW researcher Samina Sultan told Reuters.

Since returning to office, Trump has threatened most of the United States' international trading partners with import tariffs in an ⁠attempt ⁠to secure concessions favourable to Washington.

In a bid to avoid heavy duties on its exports to the U.S., for example, the European Union agreed a deal last year that included a $600 billion investment pledge.

In the five years before the COVID-19 pandemic, first-half investments by German companies in the U.S. averaged 15.8 billion euros, the data showed, almost four times ⁠the 2026 level.

That said, the 2020 to 2023 period was shaped by the "exceptional circumstance" of the pandemic, Sultan said, with some years ​marked by net investment outflows.

The researchers also examined the composition ​of investment flows over 2025 and found that both direct-investment loans and reinvested earnings were exceptionally high, while ⁠equity capital ‌in ‌the narrower sense – the balance of new ⁠investments and liquidations – remained below average.

"Companies ‌that are already active in the United States are therefore continuing to ​reinvest the profits they ⁠earn there in the country," Sultan said.

"This ⁠suggests that the U.S. remains an attractive market overall."

However, companies ⁠were hesitant to ​commit new capital, she said.