Dean’s Comment on the meeting between President Trump and Federal Chancellor Merz by Ambassador (ret.) Dr. Peter Ammon From the outset of his chancellorship, Friedrich Merz made it clear that he intended to take control of German foreign policy himself, guiding the country through geopolitical uncertainty with a steady hand. His face-to-face meeting with President Trump in the Oval Office, under the scrutiny of a partly hostile press corps and ideological hardliners such as Vice President Vance, was widely regarded as the first significant trial of his leadership on the global stage.   Germany is the main driver of the EU’s substantial trade surplus with the United States. A wide array of other contentious issues loomed over the meeting: Germany’s perceived free-riding on defence in the past; diverging positions on Russia and Ukraine; and clashing interpretations of democracy and free speech. Observers feared a political ambush reminiscent of those faced by Presidents Zelensky and Ramaphosa.   Merz wisely focused on managing expectations beforehand. Nobody anticipated that he could resolve Trump’s ongoing trade war with the EU during the meeting — an issue that was largely outside his direct control. For the German side, avoiding open confrontation while maintaining essential transatlantic ties — without appearing obsequious — would already be considered a major success.   Meanwhile, Trump is navigating a precarious phase of his presidency. His promise to end the Russia–Ukraine war in 24 hours remains unfulfilled. His global trade wars have stalled. Once-powerful alliances with tech giants such as Elon Musk and Tim Cook of Apple are showing signs of strain. To make matters worse, the bond market is issuing early warnings of an impending recession coupled with inflation.   Against this backdrop of fragility, Trump presented a conciliatory stance towards the Chancellor. He may have had little appetite for escalating tensions with the German chancellor, especially since Germany overtook Japan at the end of last year to become the world’s largest creditor nation. Trump even called Merz a friend and expressed his appreciation of US–German relations. What more could Merkel and Germany have asked for?

Agora Strategy Executive Briefing on Thailand Executive Summary Thailand – despite being a U.S. ally – de facto practices “bamboo diplomacy” by pursuing flexible and pragmatic bilateral relations with America, China and other powers, swaying in multiple directions over time in line with its national interests. Tensions between the Thailand’s old political establishment and pro-reform groups will likely negatively affect political stability for the foreseeable future. Rising global protectionism and concerns over political instability are set to limit GDP growth to around 2.5%, considerably lower than that of its neighbours. Implications for International Business To mitigate pressure from the U.S. and China, Thailand is actively seeking to expand its business relationships with Europe which opens opportunities for European businesses, specifically in green mobility, green tech and renewable energy, infrastructure and transport, digital industries, biotechnology as well as the healthcare industry. The risk of further political instability in Thailand, including the risk of a coup d’etat, remains heightened; international businesses are well advised to practice continuous risk monitoring and associated scenario building, engage in corporate diplomacy, form strong partnerships with local firms, and, if possible, diversify across multiple Southeast Asian countries. While international businesses (including from China) have flocked to Thailand in the context of “China+1” in recent years, there is now a need to hedge against potential disruptions under Trump 2.0 by expanding geographic and operational flexibility across the region to avoid lock-ins. State of Play Generally, Thailand continues to grapple with political instability, restrictions on freedom of expression, and the influence of conservative elites over democratic processes. The country’s Prime minister Paetongtarn Shinawatra, in office since 2024, currently faces two major hurdles in domestic politics: First, she needs to manage the fractious internal politics of an often disparate 12-party coalition. Second, she needs to bridge the general political divide between the old establishment of royalty, bureaucracy and military, and the Pheu Thai Party (PTP) she has been leading since October 2023 and other reformist forces. If she fails either task, wider political instability, and with it the risk of a coup d’etat, will likely increase. Political instability notwithstanding, the current government has put a strong focus on sustaining economic growth as well as bringing about a more equitable income distribution to increase domestic consumption (Thailand has Asia’s highest rates of income inequality). Policies to reduce it include prolonging a debt moratorium for small scale farmers and doubling the minimum wage. Furthermore, the government tries to reduce over-dependence on the tourism sector by investing more in green and high-tech sectors and related infrastructure. However, high U.S. tariffs are likely to force the government to reallocate some public spending to counter their impact. Internationally, Bangkok currently seeks to diversify its economic dependence on the US and China by advancing trade and investment negotiations with other international partners. Thailand recently became a BRICS partner country and began accession talks for OECD membership in 2024, the second Southeast Asian country after Indonesia. Following a period of strained relations after Thailand's 2014 military coup, the EU and Thailand have revitalized their relations, most notably by reviving negotiations for an EU-Thailand Free Trade Agreement. The EU is Thailand's fourth-largest trading partner, and some analysts have suggested that the agreement could potentially double Thailand's trade with the EU. Moreover, Thailand is an important regional hub. It is particularly competitive in manufacturing due to its strong automotive, electronics, and agribusiness sectors as well as associated suppliers and supply chains. To be sure, in logistics, Singapore –also the region’s undisputed financial centre – and increasingly Malaysia, outperform Thailand. However, Thailand has become an attractive destination for international firms’ "China+1" strategy, by which they couple investments in China with a second facility in another Asian economy. The country offers a strong manufacturing base, membership in multiple free trade agreements (including with Japan, Australia, and China), and access to other markets in Asia and beyond Asia. Key Issues Geopolitics Thailand is a major non-NATO ally of the U.S., which suggests close strategic alignment with Washington. However, in reality, Thailand’s strategic posture is best described as hedging or “bamboo diplomacy”. Bangkok has maintained close relationships with the U.S. and China whilst avoiding over-reliance on either. This has allowed Thailand to simultaneously maintain close security and economic ties with the U.S. and deepen its economic relationship with China. Throughout the last decade, however, Bangkok’s relations with Beijing have expanded from mainly economic, including in the field of security and defence with arms purchases and joint naval exercises: From 2019 to 2023, China accounted for 44% of Thailand's major weapon imports, more than doubling its share compared to the previous five-year period. Relations with the U.S., in turn, have cooled because of a freeze of U.S. aid in response to the 2014 coup d’etat and U.S. criticism of Thailand’s democratic backsliding. While U.S. policymakers understand that Thailand is not “choosing China”, but rather trying to hedge, they view Thailand’s ties with China with concern. Therefore, Washington’s strategic focus has been on other allies, notably the Philippines, Australia and Japan. The EU and Thailand have decided to resuscitate negotiations for an EU-Thailand Free Trade Agreement to be completed by the end of 2025. In its immediate neighborhood, Thailand enjoys generally cooperative relations with Laos, for which it serves as a major investor in hydropower projects and other infrastructure. Ties to Cambodia have been marked by territorial disputes in the past but have recently improved as the result of an agreed freezing of the disputes and growing economic interdependence. Bilateral cooperation has since intensified in the fields of trade, investment, energy and border management. Relations with Myanmar, in contrast, have significantly deteriorated since the coup there in 2021 and the ensuing civil war. Thailand has faced a huge influx of refugees and fighting has occasionally spilled onto Thai territory. To maintain regional autonomy amid great power rivalry, Thailand has in the past a policy of putting the ASEAN group of Southeast Asian countries at the centre. It has tried to leverage platforms like the ASEAN Regional Forum and the East Asia Summit to shape regional agendas on trade, development, and connectivity. This “ASEAN centrality” fits nicely with Bangkok’s hedging strategy between the U.S. and China. However, ASEAN norms of non-interference and consensus decision-making have limited Thailand’s ability to move forward on regional issues it deems important, especially on Myanmar. In practice, therefore, Thailand increasingly choses coalitions of the willing over ASEAN to influence regional issues. Thailand is not party to the conflicts in the South China Sea or the Taiwan Strait. Any military involvement is therefore unlikely. However, an escalation in the South China Sea or the Taiwan Strait would almost certainly disrupt maritime trade routes through which a significant portion of Thailand’s trade flows. Diplomatically, its hedging strategy would almost certainly come under immense pressure. It is likely that Washington would pressure Bangkok to fulfil its alliance obligations, including the use of Thai military installations such as U-Tapao. So far, Thailand has tried to avoid becoming a pawn in a great power conflict. Geoeconomics Thailand is Southeast Asia’s second largest economy and is considered a major regional trade and manufacturing hub. The country offers a range of incentives to attract foreign direct investment (FDI), especially in strategic sectors like advanced manufacturing, digital industries, biotechnology, and green energy. These include tax-related incentives such as exemptions or reductions on corporate income tax or import duties. They also include non-tax incentives such as liberalizing foreign ownership, eased visa and work permit processes, access to infrastructure, logistics, and data access support, and faster customs clearance and project approvals. Thailand has also taken some steps to align with international environmental, social, and governance (ESG) as well as due diligence standards, particularly as demands by global investors and trading partners increase. Its approach combines regulatory reforms, voluntary frameworks, and market-driven adaptations. Also, Bangkok is preparing to align with standards such as the EU Corporate Sustainability Due Diligence Directive or the German Supply Chain Act. However, the country’s response is uneven across sectors and enforcement of compliance remains inconsistent. Thailand also is one of the largest indirect beneficiaries of U.S. tariffs against Chinese companies, as many of the latter sought alternative manufacturing bases in non-tariffed countries. As a result, exports from Thailand to the U.S. strongly increased since 2017. This has earned it the ire of the second Trump administration: The 36% tariff the country now faces is among the highest among Southeast Asian nations. Additionally, Thailand’s role in manufacturing exposes it to significant knock-on effects from global trade disruptions—even if it is not the primary target. Furthermore, Thailand would also be affected by a further decrease in economic growth in China due to a further reduction in Chinese demand for Thai components (e.g., plastics, chemicals, agri-commodities) as China is Thailand’s largest export market. Relocation or diversification to Thailand in the context of the China+1 strategy to mitigate exposure to the Sino-US trade war can be beneficial for European companies. Thailand’s government offers considerable support to investors, especially in key economic sectors. The conclusion of a free trade agreement with the EU would furthermore reduce tariffs, improve protection of intellectual property, and enhance regulatory cooperation. However, European companies must also consider Thailand’s fragile domestic politics, its structural predicaments (i.e. lack of skilled labour or compliance risks due to lax enforcement), as well as the negative impact on Thailand of the Chinese Market. Lastly, a further reconfiguration of global supply chains and trade policies under Trump 2.0. looms large on the horizon.

Agora Strategy Executive Briefing on Elections in South Korea Executive Summary South Korea’s new president Lee Jae-myung’s foreign policy direction will champion a pragmatism that could see him rebalancing previously value-driven relations with China, Russia, North Korea and Japan. While reaffirming the centrality of Korea’s alliance with the U.S. and closeness to Europe, Lee has also signaled a softer tone on China and Russia, putting the country at odds with its Western partners. Continued US pressure related to export controls and economic security will limit his room for maneuver in engaging China, but on Russia, Lee would likely follow a Trump lead in lifting of sanctions, potentially jeopardizing Seoul’s relationship with European partners. This expected recalibration and Lee’s promises for strategic investments open opportunities for European firms in many important sectors, including green tech, defense, and digital cooperation. Implications for International Business New openings in defense, digital, and green tech : Lee has reaffirmed Europe as a strategic partner and announced investments plans for key sectors, including AI, semiconductors, and batteries. Firms aligned with Korean priorities may benefit from expanded R&D partnerships. Watch Korea's Russia stance carefully : If Lee moves to reengage Moscow in lockstep with U.S. President Trump, EU-based firms may face reputational or compliance risks due to diverging sanctions environments, in addition to potential loss of competitiveness compared to Korean firms. State of Play Some calm after the storm Lee Jae-myung’s resounding election win on 3 June ends six months of political chaos in South Korea, following former President Yoon Suk-yeol’s impeachment after the imposition of martial law in late 2024. With a strong legislative majority, Lee enters office from a position of strength, bringing back a degree of stability to South Korea’s fractured domestic politics. His immediate focus will lie on negotiating a tariff deal with the U.S. He has previously condemned the tariffs as unjustified and signaled a tougher negotiation stance than the previous caretaker government, potentially in cooperation with partners like the EU or Japan.   South Korea and the EU have a solid relationship and have significantly deepened their strategic partnership. In March, they concluded a landmark Digital Trade Agreement, enhancing cooperation in areas such as digital signatures, data protection, and e-commerce, thereby facilitating smoother digital trade between the two economies. Additionally, their collaboration in security and defence has intensified, with both parties engaging in joint efforts to address hybrid threats, cyber-security, and the resilience of critical infrastructure, reflecting their shared commitment to global stability.   Lee has recently moderated his previously firebrand criticism of Japan and now supports continued trilateral cooperation with Washington and Tokyo, as both South Korea and Japan are security alliance partners of the United States. Still, historical disputes stemming from World War II and before remain a flashpoint and could derail the relationship with Tokyo, especially in the realm of security cooperation. Lee will also adopt a more conciliatory tone with Beijing on the surface—although he faces limits due to continued U.S. pressure on economic security and export controls. Key Issues A noticeable, yet limited geopolitical realignment The incoming Lee administration will maintain the U.S. alliance as the foundation of its security policy, especially considering North Korea’s advancing missile and nuclear capabilities. However, while Lee has acknowledged he wants to continue trilateral cooperation with the U.S. and Japan, he is unlikely to support deepening it further into a formal bloc, especially in defense, which he sees as risking overextension and possibly provoking tighter coordination between North Korea, China, and Russia. He will be more skeptical about joint drills and defense integration. This will slow progress on defense interoperability and supply chain integration, as Lee shifts focus toward economic, cultural, and social cooperation with Japan.     President Lee will reorient foreign policy toward Korea’s immediate neighborhood, de-emphasizing South Korea’s security links to Europe or the Taiwan Strait, prioritizing economic ties instead. On North Korea, he will maintain deterrence while attempting to re-open dialogue and humanitarian cooperation, coordinated with America to avoid marginalization in any talks with Kim Jong-Un. Should President Trump re-engage with Moscow, Lee will likely follow, eyeing economic opportunities for Korean firms and Russian leverage in talks with the North. This would lead to friction with Europeans and could complicate sanctions compliance for European firms doing business in South Korea.   China remains South Korea’s biggest trading partner, with 19.5 per cent of total exports going to the country in 2024, a drop from 26 per cent in 2020. Lee has vowed to boost economic engagement with Beijing. But this may prove difficult, as U.S. pressure on export controls and tech alignment intensifies. While Seoul’s tone toward Beijing will soften, quiet de-risking and market diversification will continue. At the same time, Lee will seek closer coordination with partners—including the EU, Japan, ASEAN, and APEC—to hedge against a renewed wave of U.S. trade volatility. Businesses should prepare for a more autonomous South Korea: flexible, hedging its bets, and focused on securing regional influence on its own terms. An economic agenda providing opportunities for European businesses Lee’s economic platform rests on strong public investment—especially in high-tech and green industries—and recalibrated trade diversification. U.S. tariff threats remain a central concern and represent the most crucial stumbling block for Seoul’s relations with the US. Sectoral tariffs on steel, aluminum, and automobiles have already dented Korean exports in May to both the US and China, while exports to the EU have increased. Trump’s threats to increase some tariffs to 50% adds further pressure. Lee condemned these measures and signaled his intention to coordinate more closely with similarly affected partners—especially the EU and Japan—to develop joint responses or push for reform. For European firms, such alignment could lead to better outcomes.   Korean firms are increasingly setting their sights on the European market. Investments for example in the battery and electric vehicles (EV) sector could increase, helping European companies to de-risk their supply chains from Chinese inputs in these sectors. A notable example is the seven-year agreement between Samsung SDI and Hyundai Motor, under which Samsung will supply prismatic batteries for Hyundai's European EVs from 2026 to 2032. These batteries featuring high nickel NCA cathodes and silicon-based anodes will be manufactured at Samsung SDI's Hungary plant, enhancing Europe's EV supply chain resilience.   Defense is another promising area. Lee upholds South Korea’s longstanding bipartisan commitment to treating the defense sector as an engine of industrial growth. His administration is expected to boost funding for military R&D, strengthen public-private coordination, and expand international partnerships. With Korean defense exports rising and European rearmament underway, there is clear potential for joint production, co-development, and technology transfer in both directions.   Lee’s green energy ambitions—particularly in offshore wind—create another opportunity for European businesses. Recent auctions for up to 8 GW of offshore wind capacity, including major projects by Copenhagen Offshore Partners and Equinor, offer European firms new avenues for investment and collaboration. Thos are already active in Korea’s wind sector and stand to benefit from increased public offerings.

Agora Strategy offers regional expertise and analyses on geopolitical risks and developments worldwide. The company is supported by its global network of more than 300 Senior Advisors and Fellows. Global Network Our 300 + senior advisors and fellows drawn from the fields of politics, diplomacy, security and defense, business and academia, are regionally and locally-connected across the world. Operating successfully in foreign markets requires a profound understanding of political, economic and social conditions. Selected Agora Experts Filter elements by name Alle Sub-Saharan Africa Asia-Pacific East Asia Russia and Central Asia Middle East, North Africa and Türkiye Eastern Europe and Western Balkans Central- and South America North America Western Europe Filter elements by name Alle civil society law US-China, EU-China, China-Russia relations cybersecurity EU-policy aerospace geoeconomics emerging technologies migration supply chains fiscal policy foreign trade energy maritime security defense policy and military diplomacy intelligence conflict resolution and prevention climate global development Good Governance terrorism foreign- and security policy digitalization transatlantic relations multilateralism Expertise Regions Reset filter Filter by Adham Z. Sahloul [Expertisen] USA, Transatlantic Affairs, Middle East, Indo Pacific more Info Alexander Gabuev [Expertisen] China, Russia, Central Asia more Info Ambika Vishwanath [Expertisen] India, Multilateralism, Water Security more Info Armin Reinartz [Expertisen] China, Hong Kong, Japan, Digital Policy more Info Cathryn Clüver Ashbrook [Expertisen] USA, Transatlantic Relations more Info Damjan Krnjević Mišković [Expertisen] Caucasus, Silk Road Region more Info Daphne Alvarez [Expertisen] Latin America, Colombia, Geoeconomics more Info Denys Pashchenko [Expertisen] Ukraine, Europe, Russia/CIS, Trade more Info Dominik P. Jankowski [Expertisen] Defence, NATO, Transatlantic Relations, Poland more Info Dr. Albrecht Conze [Expertisen] Energy, Trade, Finance more Info Dr. Antje Nötzold [Expertisen] Astropolitics, energy policy, science communication more Info Dr. Aykan Erdemir [Expertisen] Türkiye, EU-Türkiye relations, sanctions more Info Dr. Cameron Munter [Expertisen] USA, Pakistan, Balkan, Conflict Resolution more Info Dr. Ceyhun Emre Dogru [Expertisen] Turkey, strategy, corporate affairs, politics more Info Dr. Charmaine Misalucha-Willoughby [Expertisen] Philippines, China, Taiwan more Info Dr. Constantinos Adamides [Expertisen] Cyprus, Conflict Resolution, Energy Security more Info Dr. Cornelius Adebahr [Expertisen] EU, Transatlantic Relations, Foreign and security policy Iran more Info Dr. David Jalilvand [Expertisen] Geoeconomics, climate policy, energy policy, Middle East more Info Dr. Dina Habjouqa [Expertisen] Jordan, EU, democratization and development more Info Dr. Gerhard Conrad [Expertisen] Middle East, Intelligence services more Info Dr. Harald Braun [Expertisen] Western Europe, USA, Corporate Government Affairs more Info Dr. Irene Giner Reichl [Expertisen] China, Brazil, International Development, Sustainable Energy more Info Dr. Jagannath Panda [Expertisen] China, India, Indo-Pacific more Info Dr. Jeremias Kettner [Expertisen] Middle East, Qatar, GCC countries more Info Dr. Marko Savkovic [Expertisen] Serbia, Balkans, Civil-Military Relations more Info Dr. Nahla Yassine-Hamdan [Expertisen] Middle East, Regional Security, Conflict Mediation more Info Dr. Oliver Stuenkel [Expertisen] Latin America, Economic Development more Info Dr. Peter Ammon [Expertisen] Western Europe, USA, Multilateralism more Info Dr. Tim Oliver [Expertisen] UK, Brexit, EU Politics more Info Dr. Zsuzsa Anna Ferenczy [Expertisen] China, Taiwan, EU more Info Dragisa Mijacic [Expertisen] Serbia, Economic Developments more Info Edward Kahuthia Murimi [Expertisen] International human rights law, governance in the African context more Info Eka Tkeshelashvili [Expertisen] Ukraine, Georgia, Law, Security more Info Ferdinand Gehringer [Expertisen] Homeland and Cyber Security more Info General (ret.) 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Agora Strategy defined the key criteria for selecting promising government clients and conducted a detailed stakeholder mapping analysis and prioritized key targets. Agora Strategy developed a concrete engagement strategy and supported the client during negotiation stage. Strategic engagement and political positioning Our 300 + senior advisors and fellows drawn from the fields of politics, diplomacy, security and defense, business and academia, are regionally and locally-connected across the world. Operating successfully in foreign markets requires a profound understanding of political, economic and social conditions. The Challenge An international financial consultancy and auditing company seeks to improve its global market reach. The expansion strategy’s key focus lies on reforming public governance structures. This includes public administration efficiency, public servant training, public finance and anti-corruption efforts. The client requires a comprehensive market entry strategy including a concrete concept of how to gain access to high-level political and administrative representatives and to avoid political pitfalls. The Agora Approach Together with its global network of on-the-ground experts, Agora firstly defines key criteria for promising government clients. They shall advance an internal reform process, bear high economic potential and simultaneously lack administrative infrastructure efficiency. Secondly, Agora conducts a detailed stakeholder mapping containing potential advocates as well as antagonists and prioritizes key targets. Most promising candidates are potential new EU and NATO member states, which have to fulfill access conditions and require assistance in doing so. Thirdly, Agora develops a concrete engagement strategy to approach political and administrative key decision-makers, supported by Senior Advisors with diplomatic, military and governmental background. Furthermore, Agora supports the client during the negotiation stage and provides political and diplomatic knowhow on country specifics and internal processes. Agora constantly keeps the client up to date and monitors global risks and investment opportunities relevant to the client. The Outcome The client signs three new government contracts during the first half-year period after the Agora kickoff Agora organizes roundtables in Southeast Europe & Middle East to position the client at highest level Agora develops a positioning strategy for the client-advised governments in Germany, France and the EU. This leads to an enlargement of the client’s mandates and a close strategic cooperation with Agora Agora continues to advise the client during the implementation of action recommendations and with global risk monitoring Home / Services / Strategy consulting /

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