German Firms in the US: A Bumpy Ride Ahead?
Deteriorated Opinion of German Businesses in the US within Trade Policy Context - Deterioration of sentiment among German companies in the United States regarding trade policy
Things are looking rough for German businesses nestled in the good ol' US of A. According to DIHK, a staggering 44% of these companies are bracing for a downturn, compared to just 7% skeptical about the economic climate back in the fall. In the words of DIHK's foreign trade chief, Volker Treier, "it's like playing a game of Whac-a-Mole with trade policies here. This rollercoaster ride is unsettling investments and leaving even established companies feeling queasy."
Approximately one-third of these businesses remain optimistic, while a quarter anticipate a decline. A survey of roughly 100 such companies was conducted between March and mid-April.
According to Treier, what companies today yearn for is stability. The dicey see-saw of tariff announcements and their subsequent reversals is freezing investment decisions and stirring up doubts about the future of the US as a thriving business hub. As of now, only 24% of the companies surveyed are planning on pumping more money into local investments, compared to 37% back in the fall of 2024. Contrastingly, 29% are eyeing a reduction in investments, a notable jump of 11 percentage points.
- US
- DIHK
- Trade Policy
- Tariff Policy
- Economic Conditions
- IHK
- Volker Treier
Some bigger picture insights:
- While concrete sentiment from German companies in the US isn't explicitly discussed, the erratic U.S. trade policies are thought to be leaving businesses across the globe in a state of uncertainty[2]. This limbo might be trickling down to the German companies operating in the US.
- There's been a noticeable dip in U.S. investments in Germany, with a 27% decrease in 2024 in projects spearheaded by American firms[2]. This doesn't directly reflect the sentiment of German companies in the US, but it does hint at a broader trend of investment hesitance due to economic uncertainties.
- Within Germany, economic sentiment among companies has experienced a mild uptick. The ifo Business Climate Index climbed in May 2025, indicating less gloomy outlooks for the future[4]. Similarly, the ZEW Indicator of Economic Sentiment improved significantly in May, hinting at a brighter economic outlook due to factors like reduced tariff disputes[5].
In conclusion, while the exact sentiment of German companies in the US may not be crystal clear, the whimsical U.S. trade policies seem to be perpetuating a climate of uncertainty. However, there are glimmers of improving economic outlooks on the horizon in Germany.
- Despite not receiving explicit sentiments from German companies in the US, global businesses might be feeling uncertain due to the unpredictable nature of U.S. trade policies, which could indirectly affect German companies operating in the U.S.
- The economic conditions for German businesses in the US might be impacted by the decline in U.S. investments in Germany, as American firms showed a 27% decrease in projects in 2024.
