American investment

German business increasing US investment

Oct 20 2005 Lake Worth FL USA The prospects of hurricane Wilma did not deter the dancers from T
The party has not stopped. Source: Imago

German-American relations are at an all-time low, right? The Atlantic is wider than it’s ever been? Not so fast. In fact, the truth is: Despite the tariffs and the toxic tweets, German business ties with the United States have rarely been stronger.

The booming US economy, low taxes and light-touch regulation are attracting record levels of German investment. A new survey from the German Chambers of Commerce Abroad shows that half of German companies currently in the United States plan to boost their investment, with 53 percent also planning to hire more staff.

Wilbur Ross, President Trump’s Trade Secretary, was last seen slapping tariffs on European steel and aluminum. But he said radical US tax cuts — Washington recently slashed the corporate tax rate to 21 percent from 35 percent — are still attracting foreign businesses.

One such company is Compugroup Medical, a German medical software firm. CEO Benedikt Brückle said they intend to substantially expand their US presence, and will open a third office some time this year. “The US climate is extremely positive” for his company, he said. Compugroup manufactures American software to sell to US clients, he said: “We’re not selling steel.”

Trump, the business-friendly president

Jan-Philipp Mohr is another German tech CEO. He founded Hashplay, a software company. He praises the support offered to business by states and cities, who compete to attract investment. But he said the groundwork was laid in Washington: “It’s amazing how many business-friendly policies Trump has pushed through in a short period.”

Household names like Siemens and Mercedes also say they’re sticking with the US. Although Mr. Trump singled out Mercedes for criticism in recent months, its US chief executive Jason Hoff said the company is committed to the United States. He praised the country’s infrastructure, well-educated workforce and safe business environment, emphasizing that two-thirds of Mercedes SUVs made in the US are destined for export to third countries.

Mr. Hoff did say that Mr. Trump should do a better job of supporting free, unhampered trade. But this weekend, the Trade Secretary defended his boss, saying that the US does not want a trade war. “In fact, we want to abolish all tariffs in the medium term,” Mr. Ross claimed.

Nor have German energy companies been put off by Mr. Trump. In the last two weeks, Innogy, E.ON and EnBW all announced new American projects. Barbara Humpton, head of Siemens in the United States said the economic advantages outweigh any Trump effect: “The entrepreneurial spirit is unique here, and deregulation means the country offers something very unusual.”

Unprecedented foreign investment

US state representatives say the current wave of foreign investment is unprecedented. At trade fairs like this weekend’s Select USA event in Washington, trade officials including Missouri’s Chris Gutierrez have been meeting with German companies. Pharma giant Bayer already has a major presence in the region.

At Select USA, conversation often turned to the trade tensions. “These tariffs bring uncertainty, and no business likes uncertainty” said Mr. Gutierrez. Despite the recent tension, he said commercial relations between Germany and the US have never been stronger.

In North Carolina, 15 German companies are planning to launch new projects this year, an increase on last year. “For many companies which were planning to invest, the tariffs have spurred people into early action,” said Annika Jostmeier, whose job is to attract foreign businesses to the state.

Mr. Brückle, head of US operations for the software company Compugroup, said he thinks German hostility to the United States can be a real problem. “I think we Germans look too negatively on America now. My American colleagues think very differently about Trump.”

Annett Meiritz is a US correspondent for Handelsblatt in Washington D.C. Katharina Kort is a New York correspondent for Handelsblatt. She previously covered Italy’s politics and economy. To contact the authors: kort@handelsblatt.commeiritz@handelsblatt.com 

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