American subsidies for promoting climate-friendly technologies are attracting German companies to the United States, a study by the German Chamber of Commerce and Industry (DIHK) published on Wednesday has shown.
The DIHK study covered 2,400 companies from all sectors and revealed that one in ten is already planning to relocate production abroad.
The most popular ‘destination’ is North America, particularly the United States.
Twenty-three percent of vehicle manufacturers and suppliers are considering relocating production. According to U.S. law, new tax incentives for electric vehicles will be granted to manufacturers who assemble them or procure key inputs in North America.
German companies operating abroad are simultaneously facing increasing problems due to trade barriers, which 56 percent of surveyed companies reported, the highest since the start of the survey 18 years ago.
– We clearly see a sad trend towards protectionism – said Volker Treier, head of trade at DIHK.
One-fifth of surveyed companies complain about discrimination in input regulations in the countries where they operate, such as those in the U.S. Inflation Reduction Act.
More than half of the companies are troubled by sanctions imposed by the EU and other countries on Russia and Belarus due to the Russian invasion of Ukraine and Russian counter-sanctions.
– Our research confirms the new reality we have been facing since the beginning of the aggressive war (in Ukraine) – said Treier, estimating that German real exports will increase by 2.5 percent this year, one percentage point lower than the average over the past ten years.
