The Fortune of German Businesses in the US: A Sharp Decline in Optimism
Deterioration of Business Mood among German Companies in the U.S. - U.S. Perception among German Companies Experiences Significant Deterioration
Listen up! The sentiment of German businesses in the US is taking a nose dive, according to DIHK, as 44% of these businesses anticipate an economic downturn. That's a whopping six-fold increase from just the fall, when a mere 7% expected such a turn of events. What's causing this rollercoaster ride, you ask? Well, it seems like a carousel of policies from the US government, creating uncertainty, hindering investments, and even unsettling established companies, as DIHK's foreign trade chief, Volker Treier, puts it.
A third of these companies still keep their hopes high for a positive business development, but a quarter are bracing for a decline. DIHK surveyed about 100 German businesses operating in the US between March and mid-April.
Treier tells us that what companies are now lacking is reliability. flip-flopping announcements and tariff decisions are making investment decisions a rollercoaster and raising "fundamental questions" about the future of the US as a business location. Currently, only 24% plan to expand their local investments, compared to 37% in the fall of 2024. On the other hand, 29% are considering a reduction of investments, a notable increase of 11 percentage points.
- United States
- DIHK
- Investment Plans
- Volker Treier
- Exports
Insight:
After three straight years of export decline, German exports are projected to drop by 2.5% in 2025. The business environment is tough, causing pessimism among German companies.
The US tariff policy poses significant issues for German businesses. It's damaging their export prospects and making them question the future as a location for investment. The policy, affecting international competitiveness, has contributed to a negative balance of investment plans, with nearly one-third of companies planning to cut back on investments.
- The decrease in optimism among German businesses operating in the US, as revealed by DIHK's survey, is largely due to concerns about the American tax policy and its impact on international competitiveness.
- The uncertain business environment in the US, marked by frequent policy changes and tariff decisions, has left many German businesses questioning the reliability of the country as a viable investment location.
- The pessimism among German companies, coupled with the US tariff policy, has contributed to a negative balance of investment plans, with more businesses planning to reduce their local investments than expand them. This trend is expected to impact the upcoming year, potentially contributing to a further decline in exports.
