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German and US Flag

After eight years, the United States has replaced China as Germany’s most important trading partner, with significant shifts, particularly in imports. In the first half of the year, the trade exchange with the U.S. amounted to approximately 127 billion euros, surpassing the 122 billion euros with China, according to Reuters’ calculations based on preliminary data from the Federal Statistical Office.

In 2023, China had maintained its position as Germany’s top trading partner for the eighth consecutive year, with a trade volume of about 253 billion euros, narrowly edging out the U.S. by a few hundred million euros. Lola Machleid, a foreign trade expert at the German Chamber of Commerce and Industry (DIHK), noted that the U.S. has overtaken China in total trade volume, which includes both imports and exports, due to the resilient U.S. economy boosting exports. Overall, German exports to the U.S. grew by 3.3% to nearly 81 billion euros in the first six months, while trade with China decreased by almost 3% to just over 48 billion euros. Imports from China dropped by nearly 8% to 73.5 billion euros, influenced by Germany’s economic weakness, consumer restraint, and a desire for more diversified supply chains. In contrast, imports from the U.S. fell by only 3.4% to 46.1 billion euros, supported by energy resource deliveries such as liquefied natural gas. Machleid emphasized the uncertainty of the ongoing competition between the U.S. and China as Germany’s top trading partner, given the current geopolitical uncertainties and economic developments in all three regions. She stressed the importance of avoiding trade disputes and new trade barriers for Germany’s highly interconnected economy.

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HANNOVER MESSE 2024

Now it’s official: Germany has overtaken Japan to become the third largest economy in the world after the USA and China. According to the Japanese Cabinet Office, Japan’s gross domestic product (GDP) grew by 1.9% in 2023 adjusted for inflation, while Germany’s shrank by 0.3%. However, due to the strong devaluation of the yen, Asia’s oldest industrialized nation only reached 4.21 trillion dollars in dollar terms, compared to 4.46 trillion dollars in Germany. Source.

Microsoft will invest $3.44 billion in Germany

U.S. software giant Microsoft will invest 3.2 billion euros ($3.44 billion) in Germany in the next two years, mostly in artificial intelligence, offering a boost to Europe’s largest economy as it faces its worst slump in 20 years. Source.

Interested in going to Germany? Germany also has investment incentives:

• R&D Spending Incentives
• Germany’s High-Tech Strategy 2025
• EU R&D Grants
• R&D Tax Credits in Germany

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Intel invests in Germany: Over the next few years, two semiconductor factories that are unique in Europe are to be built in the capital of Saxony-Anhalt. Intel has reached an agreement with the German federal government on an extended scope for the mega-project. The investments in Magdeburg are to amount to more than 30 billion euros. The fabs are to produce ultra-modern wafers and use the most advanced technologies of the Intel Angstrom era in production.

Wolfspeed, Inc. (NYSE: WOLF), the global leader in Silicon Carbide technology and production, today announced plans to build a highly-automated, cutting-edge 200mm wafer fabrication facility in Saarland, Germany. The company’s first fab in Europe will be its most advanced, creating a breakthrough innovation Silicon Carbide development and production facility in the European Union to support growing demand for a wide variety of automotive, industrial and energy applications. The Wolfspeed facility is planned as part of a collaboration within the IPCEI for Microelectronics and Communication Technologies framework, and is dependent upon state aid approval from the European Commission. IPCEI funding is intended to support technology development and initial deployment within this project. ZF Friedrichshafen also intends to support the new construction by making a sizable financial investment as part of a new strategic partnership announced separately.

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