A new academic study has revealed that major German corporations find themselves in an economic bind, unable to break ties with either the United States or China without facing catastrophic financial consequences.
Researchers from the University of Sussex and King’s College London examined the business relationships of companies listed on Germany’s major stock indices, discovering extensive dependencies spanning multiple industries and individual corporations.
The analysis shows automotive and machinery companies rely most heavily on Chinese markets for sales, while chemical and pharmaceutical businesses depend primarily on American operations for research and development activities. Technology, telecommunications, and semiconductor firms face particular challenges with critical suppliers located in both nations.
“Leading industrial players like Siemens and BMW were built in a fundamentally globalised system and can’t decouple from either China or the US without devastating losses,” explained Steven Rolf, a political economist at the University of Sussex who helped conduct the research.
The study highlights specific examples of these complex relationships. BMW earns more money from Chinese operations than from American business while simultaneously relying on Chinese battery manufacturer CATL for components worth more than 1.4 billion euros ($1.5 billion).
Meanwhile, Siemens derives 24% of its total revenue from United States operations and 12% from China, with supply chain networks deeply connected to both countries.
According to Rolf, these findings demonstrate the challenge facing German policymakers as they attempt to navigate increasingly strained relationships between Washington and Beijing.
