German Firms Reassess U.S. Investments Amid Rising Trade Tensions

President Trump has justified the introduction of tariffs on imported goods by asserting that such measures will encourage companies to relocate production back to the United States, thereby boosting domestic employment.

However, for German businesses—many of which have maintained manufacturing operations in the U.S. since the late 1800s—these claims seem unpersuasive. Currently, thousands of German firms operate American factories, representing 12 percent of the nation's foreign investment portfolio.

Automobile giants such as BMW and Mercedes-Benz have long established plants across the U.S., while in 2023, confectionery company Haribo launched its first manufacturing facility in Wisconsin after years of importing its signature gummy bears.

Despite this longstanding presence, an increasing number of German companies are reevaluating their U.S. investment strategies. Recent surveys reveal a trend of German manufacturers scaling back investments in the American market, accompanied by a growing pessimism about future prospects among those already operating there.

The German Chamber of Commerce and Industry conducts regular surveys of roughly 6,000 German enterprises with U.S. operations to assess economic sentiment. While these companies traditionally expressed optimism above average, their outlook has deteriorated since the initial tariffs were announced on April 2.

Volker Treier, head of foreign trade at the chamber, remarked, "Their sentiment has shifted contrary to the general trend. Tariffs act as a significant deterrent."