Global Business Briefing with His Excellency Andreas Michaelis

On September 26, 2024, Meridian International Center, alongside Ms. Lisa Shoemaker of Idemia Group and Ms. Jordana Siegel of AWS, hosted his Excellency Andreas Michaelis, Ambassador of Germany to the U.S., for a Global Business Briefing. The conversation, moderated by Mr. Puru Trivedi, Vice President of External and Corporate Affairs at Meridian, covered potential trade and economic in Germany amidst new technological developments, the ongoing war in Ukraine, and the publication of the Draghi report.  

Here are some top takeaways from the program

1. Potential Pressure on China 

Germany and the U.S. have long been strong allies, politically and economically. However, as China continues its push to dominate key international markets and disrupt the global supply chain, both countries will have to further their collaboration to significantly push back against this looming economic threat. In 2023, Germany prioritized a “de-risking” strategy that would see the country diversify its supply chains and export markets away from China, leveling the playing field for German companies and making room for the U.S and Germany’s trade relations to deepen. In early 2024, the U.S. quietly replaced China as Germany’s largest trading partner as combined exports and imports totaled $68 billion. Looking forward, as both countries’ economic and political interests align, the two economic superpowers could be essential to protect Western markets from Chinese influence. 

2. Germany Reaches a Turning Point 

Early in 2024, Mario Draghi, former European Central Bank President, finalized his report on the future of European competitiveness. The report emphasized the urgent need for a renewal of Europe’s economic model and warns of possible de-industrialization throughout the region, the effects of which have already begun affecting the German economy. To address concerns of de-industrialization, the German government has undertaken several initiatives to incentivize investment and accelerate progress on infrastructure projects. As the European Union navigates a new era, with possible reforms in the defense, energy, and technology industries, Germany, too, will enter a critical period of growth and change that may define the country’s economy for decades. 

3. Em(Powering) Germany 

Amidst Russia’s attacks in Ukraine, Germany has completely moved away from Russian fossil fuels. This drastic change in the country’s energy supply, somewhat lessened by four liquefied natural gas terminals importing gas from the U.S. and Qatar, has resulted in an energy crisis that has massively increased the price of gas in the country. German companies have been greatly affected and Germany’s economy is vastly underperforming in comparison to its European neighbors. In need of affordable energy, Germany will now turn to the U.S. to grow and stabilize their energy grid. Clean energy subsidies and overall cheaper energy prices have motivated German companies to invest and expand their U.S. operations. Moreover, as Germany transitions from gas to different forms of renewable energy, successful U.S. policies like the Inflation Reduction Act and general investment in renewable energy technologies have positioned the U.S. as a possible leader, model, and most importantly, partner to follow during this massive undertaking.  

4. Technology Reforms on the Horizon 

While Germany’s economy is facing an array of challenges, its technology industry remains remarkably strong, with revenue expecting to rise by 4.4% compared to the previous years’ 2.2%. However, while the industry continues to outperform the country’s economy at large, its growth is lacking when compared to that of other major economies like the U.S. and China, which are expecting a 6.3% and 5.7% increase respectively. Historically, Germany has been a leader in the European Union when it comes to sweeping regulations within the technology industry, targeting tech giants like Google and Meta often. It is, however, possible that the Draghi report’s warnings about Europe’s declining innovative capabilities and the country’s stalling economy are the motivating factors necessary to implement the sweeping regulation reforms the country has long entertained/ 

5. The E.U. and Germany in the Age of War 

The war in Ukraine has completely changed how the European Union and its member states operate. Known best for facilitating diplomacy and trade within the region, the European Union has now begun growing its defensive capabilities. This shift was solidified with the appointment of the bloc’s first ever Defense Commissioner, Andrius Kubilius, on September 17, 2024. Germany has followed suit, pledging to spend 2% of national GDP on defense and undertaking a major overhaul of its military. In 2022, the country spent $8 billion to purchase 35 Lockheed F-35s from the U.S and in 2024 they are now looking to invest in eight more. Germany’s defense sector is now one of its most profitable industries and because of the country’s strong diplomatic and economic ties with the U.S., opportunities for investment and growth within the industry could result in better bilateral trade relations for both countries. 

Learn more about the Meridian Center for Corporate Diplomacy

The Meridian Center for Corporate Diplomacy harnesses the power of the private sector to drive international cooperation and strengthen diplomacy. Through signature programs like Global Business Briefings and the Corporate Diplomacy Global Leaders Program, we equip business leaders with the knowledge, strategies, and connections needed to:

• Accelerate collaboration on shared global challenges

• Navigate increasingly complex geopolitical risks and opportunities

• Strengthen America’s global competitiveness

For a full list of programs, visit www.Meridian.org/corporate