Cross-border investment and trade give rise to both economic gains and economic vulnerabilities. As geopolitical competition is intensifying, governments increasingly resort to restricting cross-border investment and trade. Policies are informed by a desire to limit security risks and secure technological advantages rather than pursue efficiency gains.
Topic:
Science and Technology, Foreign Direct Investment, Strategic Competition, and Geoeconomics
Intensifying US-Chinese rivalry will increase pressure on Germany to support a more hawkish US geo-economic policy. The new German government should give Washington support in as far as US policies seek to create an economic level playing field vis-à-vis China. Given its dependence on international trade and investment, Germany should seek to resist a broader politicization of international economic relations.
Topic:
Economics, International Trade and Finance, Geopolitics, and Rivalry
US-Chinese rivalry will increasingly play out in the geo-economic realm. The use of secondary sanctions – especially secondary dollar sanctions – negatively affects German economic interests. The new German government should therefore intensify efforts to promote the euro as an international currency coequal to the dollar in addition to lending its qualified support to EU anti-coercion policies.
Topic:
Economics, Sanctions, European Union, Rivalry, and Geoeconomics
The geo-economic conflict between the United States and China as well as uncertainty about America’s longer-term commitment to a liberal and rules-based multilateral order pose risks to Germany’s economic prosperity and national security. The new German government must systematically identify economic dependencies and develop a forward-looking and comprehensive strategy to address vulnerabilities.
Topic:
Defense Policy, European Union, Deterrence, and Geoeconomics
Geo-economic policies have become an increasingly important feature of international politics – and not just since the war in Ukraine. The EU has proposed an economic anti-coercion tool to deter third-party coercion. This policy brief analyses the risks and benefits as well as the challenges related to the EU’s proposed deterrence policy based on a review of the academic literature on coercion and the effectiveness of economic sanctions.
Topic:
Sanctions, Coercion, Geoeconomics, and Russia-Ukraine War
Without a sound economic foundation, political and military ambitions cannot be sustained. This also applies to the geopolitical competition between the United States and its rivals. So far, America and its allies are economically ahead of Russia and China. But where Russia’s long-term outlook is weak, China’s economic might is rapidly increasing. Despite the war in Ukraine, Washington will have to focus its resources on Asia. In Europe, Germany, with its large financial and economic base, should lead on military spending and enhanced security.
Topic:
NATO, Geopolitics, Geoeconomics, and Competition
Political Geography:
Russia, China, Europe, Germany, and United States of America
Germany is at risk of sustaining collateral damage in the face of intensifying US-Chinese competition and conflict. China’s ascendance and America’s desire to preserve the status quo lock Beijing and Washington into a classic security dilemma. The United States sees China as a potential regional hegemon in Asia and as an emerging global systemic challenger. China sees the United States as impeding its rise. Security competition is already well underway. So are geo-economic and geo-technological competition and conflict. For Germany, a position of relative neutrality or equidistance is not an option, it should consider pursuing a multi-track approach.
Topic:
Security, Transatlantic Relations, Strategic Competition, and Geoeconomics
Political Geography:
China, Europe, North America, and United States of America
The economic fallout from the war in Ukraine has been very significant. The consequences of a war in East Asia involving the United States and China would be much worse. And even if a Sino-US military confrontation can be avoided, geo-economic conflict between the two powers is going to intensify. Washington will put increasing pressure on Germany and Europe to align their policies with Washington’s geo-economic strategy.
Topic:
Economics, Strategic Competition, Rivalry, and Geoeconomics
Political Geography:
China, Europe, Asia, Germany, North America, and United States of America
Although President Biden has made US foreign policy more predictable, its medium- and long-term direction and concomitant implications for transatlantic relations are less certain. This report presents three scenarios of how US strategy might evolve. They provide insight into how the United States behaves in the spheres of security and international economy under different conditions and why, suggesting ways for the EU and Germany to preemptively mitigate risks and positively influence future policy.
Topic:
Security, Economics, Grand Strategy, Risk, and Transatlantic Relations
Political Geography:
Europe, Germany, North America, and United States of America
The Biden administration has just issued its Interim National Security Strategic Guidance. The guidance document states the need to “build back better at home” and acknowledges that “international economic policies must serve all Americans” – a theme often referred to as “foreign policy for the middle class”. While the interim guidance does not preclude cooperation with China in selected policy areas, it is unambiguous in considering China a strategic competitor. The prospect of intensifying China-US geopolitical and (geo)economic competition is bad news for Germany, which has high value trading and investment relationships with both countries.
Topic:
Foreign Policy, Economics, National Security, and Geopolitics
Political Geography:
China, Europe, Asia, Germany, North America, and United States of America