German mid-sized companies are responding to Trump’s trade policies with investment restraint and are increasingly focusing on Europe.
Frankfurt – The return of Donald Trump to the White House in January 2025 has created uncertainty in the German economy. Germany’s Mittelstand – traditionally strong exporters deeply embedded in global supply chains – is reacting cautiously to prospects in the U.S. Market. Various surveys and studies demonstrate how this perception is translating into concrete economic decisions. The shift reflects a broader trend of businesses reassessing geopolitical risk and supply chain resilience.
Investment Restraint is Rising Rapidly
Research shows that the trade and U.S. Tariff policy under President Trump has significantly altered the risk perception of German companies. Data from the Institute of German Economy (IW) shows that German direct investments in the U.S. Decreased significantly in the first year of the new Trump presidency: From February to November 2025, approximately €10.2 billion flowed into the U.S. – 45 percent less than in the same period of the previous year. Investments were also more than 24 percent lower than the long-term average since 2015, according to the financial portal Investing.com.
Supporting surveys corroborate this picture: A Reuters survey from the summer of 2025 found that nearly 30 percent of German companies had postponed planned U.S. Investments and around 15 percent had canceled them altogether, as a direct response to the uncertainties of U.S. Tariff policy.
Trump Tariffs Create Uncertainty for the Mittelstand
A recent corporate survey by DZ BANK reveals how mid-sized decision-makers are reacting to the exceptional U.S. Tariff and trade policy: Given the tricky-to-plan conditions, many companies are refocusing their strategic efforts on the domestic market, and Europe. The goal is to reduce dependencies on the USA and better manage risks.
According to this survey, only around 12 percent of SMEs are directly affected by U.S. Tariffs, but almost half are already feeling indirect effects through customers and suppliers. Many companies therefore notice increased diversification of their markets and supply chains as a strategic response to fluctuating conditions.
Trump’s Volatile Trade Policy Complicates Cooperation
The uncertainty stems not only from higher tariffs but also from frequent policy changes in U.S. Trade policy. Trade agreements and customs agreements can change in the short term, making investment and export planning difficult. Several German politicians emphasize that U.S. Tariffs and protectionist measures burden global trade and complicate supply chains, which is particularly noticeable for export-oriented SMEs.
This trend is not a complete withdrawal from the U.S. Market, but rather a strategic hedge: By strengthening regional anchoring, risks from geopolitical tensions and more volatile trade relations are to be mitigated. (Sources used: Investing.com, Reuters, DZ Bank, IW)
