German manufacturers pivot investment to Asia as US tariff uncertainty mounts

German manufacturers are increasingly shifting their investment focus toward Asia as interest in the US market wanes under the pressure of Donald Trump’s trade tariffs, according to new industry data.

A survey conducted by the DIHK industry lobby group, which polled approximately 1,700 manufacturers, revealed that 44% of respondents plan to invest in the US. This figure represents a four-percentage-point decline compared to the 2025 survey results and marks the first significant downturn in investment intentions for the US since the Covid-19 pandemic.

While interest in the US has cooled, focus is shifting toward China and other Asian nations. The survey found that 34% of respondents now identify China as an investment destination, an increase from 31% last year. Despite this recent rise, investment expectations for China remain below the levels observed in 2018 and 2019.

The broader Asia-Pacific region also saw a notable gain, with the proportion of companies planning investments there rising by 5 points to reach 26%.

In contrast to the shifting sentiment regarding overseas markets, investment expectations for the Eurozone remain robust, continuing to hold at over 60%.

“Stability, the common internal market, and the shared currency provide a reliable framework,” the DIHK report stated. “Particularly in times dominated by geopolitical uncertainty, this is a factor that must not be ignored when investment decisions are being made.”

Volker Treier, the DIHK’s head of foreign trade, noted that the escalating trade tensions with Washington are impacting corporate strategy. “The trade dispute with the US is fueling uncertainty and causing companies to postpone their decisions,” Treier said.

He further observed that in Asia, and specifically in markets such as China and India, German companies are increasingly moving toward a “local-for-local” strategy, aiming to both manufacture and sell their products within those domestic markets.