Currently, more and more German companies seek to expand their presence in the U.S., writes Focus. It concerns not only such large concerns like Siemens or VW. According to experts, in addition to geopolitical tensions that make the U.S. seem like a “safe harbor,” German companies are attracted by relatively low energy prices and very generous subsidies under the new U.S. law “On Reducing Inflation. The “race for subsidies” that Brussels plans to engage in could become dangerous.
German firms “love America”: according to the German-American Chamber of Commerce, about 5,600 of them invest in the U.S. market. As of September 2022, German investments in the US economy totaled almost $650 billion. Nowadays, not only such large concerns as Siemens, VW or Linde try to expand their presence in the U.S. – in some cases even with the help of brand new production facilities, Focus writes.
Because of the U.S. administration’s plans to support companies under the Inflation Reduction Act, there are already delays or threats to stop battery plants for electric cars in Germany, such as Tesla in Grünheide, near Berlin, or the Swedish company Northvolt, which plans to build a plant in Heide in Schleswig-Holstein, but may now change its plans and start investing in the United States.
According to the expert, it is extremely unpleasant when innovative companies, for example in the field of “green technology,” “nurtured” by German and European taxpayers, are lured to the United States by subsidies.
German Chancellor Olaf Scholz and Head of the European Commission Ursula von der Leyen have already met with US President Joe Biden. They warned him about the violation of competition rules against European companies because of generous U.S. subsidies. American companies see the disadvantages of Germany itself as a manufacturing location as labor costs, digital infrastructure and a shortage of skilled labor. But most of all, they criticize high energy prices compared to international standards – even before the outbreak of the conflict in Ukraine. “They play an important role in location decisions, especially for energy-intensive businesses,” notes Simone Menne, head of the American Chamber of Commerce in Germany. Germany needs to become an even more attractive manufacturing location and, in particular, improve in terms of skilled labor, reduced bureaucracy and widespread digitalization. “This will not only help in attracting investment from the U.S.,” Focus quoted Menneh as saying.