„Der Marktzugang in China wird schwieriger“ – Dr. Timo Blenk im Interview     18.08.2025     Dr. Timo Blenk, CEO und Senior Partner der Agora Strategy Group, macht im Interview mit dem Creditreform Magazin deutlich, wie unübersichtlich die geopolitische Lage für deutsche Unternehmen geworden ist – und welche Konsequenzen sich daraus ergeben.    Sich weltweit überlagernde Störungen dominieren das Bild und stellen Unternehmen vor enorme Planungsunsicherheiten. In China werde der Marktzugang komplizierter, da Peking technologische Autonomie anstrebe. Gleichzeitig sei die Rolle der USA als verlässlicher Partner nicht mehr gesetzt, was internationale Regeln und Allianzen schwäche. Der Krieg in der Ukraine bleibe für Deutschland jedoch der gefährlichste Konflikt – mit direkten Folgen für Energiepreise und politische Stabilität.     Zugleich betont Dr. Blenk, dass neue Geschäftsfelder entstehen, etwa im Bereich Defense. Verschiedene Beispiele machen deutlich, wie klassische deutsche Mittelständler erfolgreich in die Rüstungsbranche einsteigen können. Dr. Blenk unterstreicht, dass Unternehmen geopolitische Risiken und Abhängigkeiten frühzeitig erkennen sollten – von Rohstoffen über Sanktionen bis zu globalen Handelsrouten – und so ihre Resilienz sowie ihre globale Wettbewerbsfähigkeit stärken.     Hier geht es zum vollständigen Interview:  https://www.creditreform.de/frankfurt-am-main/aktuelles-wissen/pressemeldungen-fachbeitraege/news-details/show/der-marktzugang-in-china-wird-schwieriger

Europa muss wieder verteidigungsfähig werden Im Interview mit Finanz und Wirtschaft  fordert Botschafter a.D. Prof. Dr. h.c. Wolfgang Ischinger, ehemaliger Vorsitzender der Münchner Sicherheitskonferenz sowie Ehrenvorsitzender des Aufsichtsrats der Agora Strategy Group AG, eine umfassende Reform der europäischen Verteidigungspolitik. Botschafter Ischinger betont: Europa könne sich nicht mehr auf die USA als Schutzmacht verlassen und müsse selbst handlungsfähig werden. Dazu gehöre eine deutliche Steigerung der Verteidigungsausgaben, eine Konsolidierung der Rüstungssysteme sowie ein politischer Wille zur sicherheitspolitischen Eigenverantwortung. Deutschland und Frankreich könnten dabei eine Pionierrolle übernehmen. Denn für Botschafter Ischinger ist klar: Nur ein eigenständiges, entschlossenes und verteidigungsfähiges Europa kann künftige Bedrohungen glaubwürdig abschrecken. Hier geht es zum vollständigen Interview: https://www.fuw.ch/wolfgang-ischinger-europa-muss-wieder-verteidigungsfaehig-werden-328935957590

Geopolitik – entscheidender denn je für Unternehmen Fabian Vetter, Partner & COO der Agora Strategy Group AG, spricht im aktuellen  brand eins  Interview darüber, warum geopolitische Weitsicht für Unternehmen zur Pflicht wird – und wie sie Risiken strategisch begegnen können. Vetter zeigt auf, wie geopolitische Spannungen – vor allem zwischen China und den USA – direkte Auswirkungen auf Wirtschaft und Politik haben. Er fordert eine neue strategische Herangehensweise: weg von reaktiven Entscheidungen, hin zu proaktiven Analysen geopolitischer Abhängigkeiten. Staaten und Unternehmen müssten verstehen, wo sie verwundbar sind, und ihre Strukturen, Investitionen und Lieferketten entsprechend anpassen. Denn: Geopolitik ist längst ein Wirtschaftsfaktor. Wer sie ignoriert, riskiert Wettbewerbsnachteile – wer sie versteht, schafft strategische Resilienz. Hier geht es zum vollständigen Artikel von brand eins : https://www.brandeins.de/magazine/brand-eins-thema/unternehmensberater-2025/geopolitik-it-s-the-politics-stupid

Agora Strategy Executive Briefing on Japan By Dr. Elli Katharina Pohlkamp Executive Summary Prime Minister Ishiba’s weakening position after the Upper House election loss is triggering political instability, complicating fiscal planning and heightening the likelihood of a leadership transition or snap elections, with immediate consequences for economic policymaking. Japan deepens security ties with Indo-Pacific partners and the EU amid regional tensions, while the newly signed U.S.–Japan trade deal reduces looming tariffs to 15%, restoring temporary stability in bilateral relations and shielding Japan’s automotive sector from harsher blows. Tokyo accelerates investment in digital infrastructure, secure supply chains, and decarbonization under its Economic Security framework, while the EU–Japan Competitiveness Alliance and new tariff template position Japan as a rule-making hub in an increasingly fragmented global economy. Implications for International Business European firms may benefit from smoother regulatory entry and expanded R&D collaboration as the EU–Japan agreement aligns standards on digital governance, energy infrastructure, and strategic technologies — positioning Japan as a hub for Asia-facing innovation under EU-compatible frameworks. With policymaking under strain, companies operating in Japan should prepare for potential delays in fiscal measures, tax incentives, or energy policy shifts — requiring greater agility in navigating bureaucratic or sector-specific uncertainty in the lead-up to the 2026 general election. State of Play The ruling coalition led by Prime Minister Shigeru Ishiba suffered a major setback in the House of Councillors election held on 20 July 2025. For the first time since 1955, the LDP–Komeito coalition lost its majority in the Upper House, ending its legislative dominance. While Ishiba initially took a bold stance asserting that he would remain in office to navigate critical U.S. tariff negotiations, his position has rapidly deteriorated. Ishiba’s eventual resignation now appears possible – at the latest following the party’s internal review of the election outcome in August.   The electoral defeat reflects broader public discontent, with inflationary pressures, wage stagnation, and rising rice prices fueling skepticism towards the government’s economic stewardship. Voter turnout reached around 58%, and fringe parties such as Sanseito, which promote nationalist and anti-immigration agendas, enjoyed significant gains, expanding their representation to at least 14 seats.   The emergence of smaller opposition groups pledging tax relief and welfare expansion has intensified scrutiny of Japan’s fiscal trajectory. Financial markets have already reacted, with the yen weakening and government bond yields rising, as investors anticipate heightened political gridlock and the risk of increased fiscal deficits. Internal LDP resistance to more drastic efforts like a massive stimulus suggests that only modest interim measures are likely, with any significant budgetary turnaround delayed until after the autumn Diet session.   With the government lacking a majority in either chamber, broader negotiations with opposition parties will be necessary to move forward on key issues. A cabinet reshuffle had been widely expected in early autumn to restore factional unity and reset the policy agenda ahead of the 2026 general election. However, with the prime minister possibly on his way out, this process may be overtaken by a deeper leadership transition within the LDP. In practice, Japan faces a period of slower, more fragmented policymaking, shaped by intraparty turmoil, intensified parliamentary obstruction, and growing concessions to opposition demands on fiscal, trade, and welfare policy. A leadership contest, or even snap elections, could soon follow—further weakening the LDP-led coalition’s already fragile political footing. Key Issues Japan’s Geopolitical Outlook: Overcast Japan’s strategic orientation remains firmly anchored to the United States, its principal post‑war ally and security guarantor. The U.S.–Japan alliance—enshrined in the 1960 bilateral security treaty—continues to form the backbone of Tokyo’s defence strategy, with deep operational integration through forward‑deployed U.S. forces and joint military planning. However, renewed tensions over proposed U.S. tariffs escalated this summer, only to be defused on 22 July when both sides agreed to a new trade deal. Under its terms, U.S. “reciprocal” tariffs on Japanese automobiles will be reduced to 15%, down from the previously threatened 25%, while other sectoral tariffs remain at current levels—such as the 50% steel/aluminum levy under Section 232. Japan also committed to purchasing more U.S. agricultural products, including rice and beef, and to invest roughly $550 billion in the U.S., with an estimated 90% of returns staying onshore. The deal was viewed positively in Tokyo—not only for forestalling a harsh tariff regime but also for signaling a reset in alliance economic cooperation. Simultaneously, Japan is recalibrating its regional security posture in the Indo-Pacific. Its Free and Open Indo-Pacific strategy—emphasizing maritime security, infrastruc-ture connectivity, and the rule of law—continues to guide Tokyo’s engagement with regional partners. Japan has expanded security cooperation with ASEAN, India, and Australia, while actively promoting multilateral norms in contested maritime spaces. In the South China Sea, Japan maintains a principled opposition to unilateral changes to the status quo and has stepped up capacity-building support to littoral states, particularly the Philippines and Vietnam. Tokyo regularly conducts joint maritime drills and freedom of navigation operations in coordination with U.S. and regional forces, underscoring its commitment to preserving open sea lanes and deterring China’s militarization of disputed territories.   Tensions are also rising around the Taiwan Strait, which Tokyo now explicitly identifies as a critical geostrategic concern. Increased activity by China’s People’s Liberation Army, including large-scale air incursions and amphibious exercises, has triggered alarm, prompting budget increases for missile defense, electronic warfare, and space surveillance. While Japan remains cautious to avoid direct confrontation, the blending of Chinese assertiveness with the risk of a Taiwan contingency pushes Tokyo toward greater security alignment with Washington and regional democracies.   Against this backdrop, the EU–Japan Summit on 23 July in Tokyo takes on heightened strategic significance. Hosted by the Prime Minister and attended by European Commission President Ursula von der Leyen and European Council President António Costa, it focused on coordinated responses to regional instability, Indo-Pacific maritime security, and institutionalized defense cooperation. Japan’s recent accession to the EU’s Security and Defence Partnership has formalized its role as Brussels’ principal Asian security partner. Summit deliverables are expected to include joint initiatives on critical technologies, critical raw materials, cybersecurity, and resilience against grey-zone threats. As global supply chains become more politicized and the rules-based order erodes, European–Japanese cooperation is increasingly viewed as a strategic anchor in a fragmented multipolar landscape. Geoeconomic Initiatives and Incentives Japan’s economic performance in 2025 reflects ongoing structural and external pressures, despite moderate headline growth. The economy expanded by just 1.2% in the second quarter, driven largely by export resilience and public investment. However, the yen remains weak—recently stabilizing around ¥147.8 to the U.S. dollar following early-year volatility and a brief rebound ahead of the U.S.–Japan trade deal—exacerbating energy and food import costs and weighing on household purchasing power. Inflation has moderated from last year’s peak but remains above the Bank of Japan’s (BoJ) 2% target, complicating gradual monetary tightening. With policy rates now at 0.5%, the BoJ faces a narrow path between inflation control and sustaining domestic demand. Wage growth remains uneven, and consumer sentiment is dampened by high living costs and macroeconomic uncertainty.   The broader corporate environment is characterized by elevated input costs, labor shortages, and long-term productivity challenges. Key industries—particularly logistics, construction, healthcare, and semiconductors—are under pressure from rising demographic constraints. In response, the government has sped up industrial modernization programs under the Economic Security Promotion Act. It prioritizes AI integration, digital infrastructure, and domestic capacity building in areas such as semiconductors, robotics, and hydrogen technologies. Moreover, the Ministry of Economy, Trade and Industry (METI) continues to lead strategic investments in frontier technologies, with a view toward long-term economic resilience. Supply chain security now constitutes a cornerstone of Japan’s geoeconomic strategy. The government has launched a series of public-private initiatives to diversify sourcing and production, with special focus on semiconductors, batteries, rare earths, and pharmaceuticals. Japanese firms are receiving financial and regulatory support to expand operations in ASEAN and India, while Tokyo negotiates bilateral frameworks with Australia, Taiwan, and the EU to enhance transparency and redundancy in critical supply chains. The newly launched Supply Chain Resilience Platform—a METI-led initiative—aims to strengthen traceability, logistics capacity, and dual-use infrastructure resilience, especially in the context of growing tensions on East and Southeast Asian maritime routes.   Japan is simultaneously leveraging its participation in multilateral trade and economic frameworks to bolster its strategic position. It plays an active role in regional trade blocs like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the Indo-Pacific Economic Framework, particularly on standards for digital trade, supply chain transparency, and decarbonization. Japan is also a founding member of the Regional Comprehensive Economic Partnership, allowing it to balance China through institutional engagement. These platforms are not only hedges against U.S. protectionism but also vehicles for rule-making leadership in the Indo-Pacific.   Following the recent U.S.–Japan trade deal, Tokyo is accelerating its engagement with regional and transatlantic frameworks to buffer long-term exposure to American tariff volatility. The deal and so called flat-rate tariff arrangement breaks with Washington’s past “sector-by-sector” targeting approach and gives Tokyo “diversified leverage” in navigating future U.S. trade policy. The sentiment in Tokyo has been cautiously optimistic: officials welcome the clarity and predictability of the 15% rate but remain aware that the agreement is not a comprehensive exemption and could be subject to political reversal. Nearly 30% of Japan’s U.S.-bound auto exports are expected to benefit immediately, helping avoid major disruptions in one of the country’s core export sectors.   Beyond Asia, Japan is expanding energy and infrastructure partnerships with the Middle East and Africa, including through sovereign wealth fund-backed initiatives to co-develop hydrogen hubs and critical raw material projects. Japan is also coordinating with the EU on connectivity standards and sustainable investment criteria under the Global Gateway framework. Its state-backed lenders (e.g. JBIC, JICA, NEXI) play a central role in financing outbound investment aligned with Japan’s security and supply chain priorities.   Domestically, Japan is working to contain long-term fiscal risk. However, yield curve control and institutional trust in government bonds have helped preserve macroeconomic stability for now. Fiscal stimulus remains narrowly targeted toward strategic industries and energy affordability, while METI is exploring tax reform and productivity-linked incentive schemes to unlock private-sector capital. Concerns remain that Japan may face additional fiscal pressure if U.S. tariffs escalate again in an election year context. The trade deal offers short-term relief, but analysts warn it sets a precedent for future tariff-based negotiation tactics—keeping markets wary of renewed volatility.   The digital economy is an increasingly vital pillar of Japan’s geoeconomic relevance. The government is a vocal proponent of data free flow with trust and has launched bilateral frameworks on digital standards with the EU, the U.S., and Singapore. Tokyo’s regulatory leadership in AI ethics, privacy, and cross-border data sharing—aligned with European values—positions it as a global norm-setter in digital governance, offering compatibility for EU-based digital firms, platforms, and fintechs. This evolving geoeconomic posture has created strong momentum for deeper integration with Europe. In addition to a longstanding Economic Partnership Agreement, the new EU–Japan Competitiveness Alliance —to be formally launched at the July 23 summit— will provide a structured platform for industrial cooperation, regulatory alignment, and joint investment in strategic sectors like digital technologies, clean energy, secure connectivity, critical materials, and innovation funding. It is designed to promote joint standards, facilitate industrial synergies, and coordinate responses to coercive economic practices by third countries. The agreement will also serve as a strategic complement to the newly revised U.S. trade framework, offering Japan diversified leverage in its external economic relations.   Combined, the two frameworks with the EU position Tokyo at the center of an emerging rules-based counterweight to transactional, protectionist trends in global trade—while reinforcing resilience in key Japanese export sectors. The new tariff template gives Japan room to negotiate future agreements with both U.S. and other partners like the EU, reinforcing its global trade policy autonomy. Alongside the EU–Japan Competitiveness Alliance, Tokyo is signaling its commitment to structured, multilateral economic frameworks—a clear offset to the transactional protectionism seen in recent U.S. trade policy.   For European businesses, these trends translate into expanding opportunities across both traditional and emerging sectors. Companies offering solutions in hydrogen, offshore wind, battery storage, and carbon-neutral industrial processes are well positioned to partner with Japanese firms benefiting from green transition incentives. Advanced logistics systems, digital infrastructure, and AI-driven supply chain technologies are in growing demand amid Japan’s resilience agenda. In parallel, the new EU–Japan agreement offers a framework for public-private co-financing and co-development — particularly relevant for small and medium-sized enterprises and mid-cap innovators seeking to enter Asia via a trusted regulatory environment. Moreover, Tokyo’s intensifying engagement in Southeast Asia—both bilaterally and via regional trade frameworks—opens avenues for trilateral cooperation. European firms with regional exposure may find strategic alignment in supply chain diversification, infrastructure investment, and joint venture financing through Japanese industrial and development banks.

In the Agora Strategy Group geopolitics podcast “The Future of Power”, Dr. Timo Blenk (CEO) invites decision-makers from diplomacy, business, politics and the military to discuss current geopolitical developments on a monthly basis. The core of this project is to provide information about the influences of these developments and to create a sound basis for decision-making.   This month's guest is Prof. Dr. Rafaela Kraus, professor of business and human resources management at the University of the German Armed Forces in Munich and expert on innovation and start-up ecosystems! In the 31st episode of our podcast, Dr. Blenk and Prof. Dr. Kraus talk about the future of the German Armed Forces and Germany as a defense industry location!   Sie finden unseren Podcast mit Untertiteln auch auf Youtube: https://www.youtube.com/watch?v=lEEC1JVV5cA This month's highlights Keyword innovation: organizational culture, start-ups, and the German Armed Forces ecosystem  European dependence: space, digitization, and the “geopolitical mindset” Construction site German Armed Forces: FCAS, the personnel issue, and a lack of professorships     In-house announcements All other episodes of the podcast “Agora Strategy Group” website “Agora Strategy Group” on LinkedIn Current projects, publications & events of the Agora Strategy team Agora Institute Executive Membershi p Agora Strategy Executive Briefing: Japan Facing Political Instability, U.S. Tariffs, and Regional Insecurity Agora Strategy Executive Briefing: China's Evolving Economic Arsenal: From Fragmented Retaliation to Structured Coercion Dean's Comment: Merz Meets Trump: The Art of Expectation Management

Agora Strategy Executive Briefing on Santions in China Executive Summary China’s toolbox for economic coercion has become more sophisticated, targeted, and institutionalized. Regulatory investigations, export controls, trade restrictions and legal designations are part of a growing menu of tools replacing earlier unstructured instruments like consumer boycotts. China’s sanctions regime is increasingly formalized yet remains unpredictable in its concrete application. The U.S.-China trade war has served as a successful training ground for this expanded toolkit. Recent restrictions on rare earth elements and magnets have demonstrated Beijing’s ability to exert pressure through strategic dependencies. This appears to have made an impression on the Trump administration and potentially caused the compromise reached in Geneva in early May. European firms are indirect targets – and potential future focal points. Although China has so far exercised restraint and continued what some interpreted as a ‘charm offensive’, European companies in key sectors have already faced disruptions in raw material supply. In the future, China may feel emboldened to use its economic weaponry more actively for its own advantage. Implications for International Business Reinforce supply chain resilience for critical inputs. For firms reliant on rare earths and other critical raw materials, China’s export control system is more than a bureaucratic hurdle. Given the risk of sudden supply disruptions triggered by geopolitical tensions or regulatory delays, they should invest in diversification and dual sourcing strategies to reduce the effect of potential shocks. Manage regulatory exposure and intellectual property risks.  China’s export license procedures include demands for sensitive commercial information, such as operations, workforce, end-use applications, production details, and customer lists. While many businesses appear willing to comply, doing so entails longer-term risks of handing over strategic sensitive data. Integrate scenario planning into corporate planning cycles. Companies that proactively align international strategies with the evolving landscape of strategic competition – especially those with dual exposure to U.S. and Chinese policy risks – enhance their ability to anticipate and adapt to future disruptions. China's sanctions weapons China’s use of economic sanctions is evolving fast , and the implications for European governments and businesses are far-reaching. Until recently, a key concern for foreign firms operating in China was the risk of state-encouraged consumer boycotts. In 2019 and 2020, companies were repeatedly attacked for listing Taiwan or Hong Kong as separate countries on websites and merchandise, for raising concerns about forced labor in Xinjiang, or for ending sourcing from that region. These campaigns were openly encouraged by the Communist Youth League.   In recent years, however, such public consumer boycotts have become less common. This may reflect growing caution among firms about provoking Beijing, but it may also reflect the fact that Chinese authorities increasingly rely on new tools. Today, firms whose home governments cross political red lines are far more likely to be penalized through regulatory and legal measures that are part of a broader system developed after the first U.S.–China trade war in 2018. This system is still taking shape and offers little of the legal certainty that multinational firms might hope for.   Chinese authorities now select from a growing menu of legal and quasi-legal instruments. Long-favored methods involve import restrictions by delaying customs clearance or quietly instructing firms to stop sourcing from targeted countries. In 2020, after Australia called for an independent investigation into the origins of COVID-19, China curbed a broad range of Australian exports, including nearly all wine shipments. When Lithuania permitted the opening of a “Taiwanese Representative Office” in Vilnius in 2021, it was erased from China’s customs database, effectively making it impossible for Lithuanian goods to enter Chinese ports. Other restrictions have come under the guise of trade defense tools. In early 2024, after France had pushed for EU tariffs on Chinese electric vehicles, Beijing launched an anti-dumping investigation into imports of brandy from the EU — a predominantly French product.   Another favored tactic has been to directly target foreign firms operating in China .  After South Korea agreed to deploy a U.S. missile defense system (THAAD) in 2016, Beijing forced dozens of Lotte stores — the South Korean retail giant — to shut down, citing fire safety and other regulatory violations. In recent years, such actions have increasingly been channeled through domestic instruments such as antitrust law. This approach, too, remains in use. U.S. firms like Google, DuPont, and Nvidia have all come under scrutiny in recent months as part of the rivalry with Washington. Even when probes do not result in formal penalties, the uncertainty it generates has real commercial consequences — by making business operations harder, depressing investor confidence, and exposing companies to reputational risks in China’s market.   What marks a clear shift is China’s construction of a legal sanctions framework that allows it to target foreign firms and individuals with greater coherence and precision. Three instruments stand out: First, the Unreliable Entity List, launched in September 2020. It allows Chinese authorities to impose punitive measures on foreign entities deemed to harm China’s national sovereignty, security, or development interests. In practice, it has been used mainly against U.S. defense contractors involved in military cooperation with Taiwan. In 2025, however, it was also applied to clothing group PVH and biotech firm Illumina in retaliation for U.S. tariffs.   While officially accused of violating market principles, Illumina is widely believed to have been targeted for lobbying in support of the Biosecure Act — a proposed U.S. law aimed at restricting Chinese access to American genetic data and biotech infrastructure. This law signals a shift toward techno-nationalism, potentially accelerating the decoupling of Western and Chinese biotech supply chains and prompting allies to adopt similar screening mechanisms. This would have severe implications for the global pharma industry as it restricts access to Chinese-made biotech components, compels firms to reassess vendor relationships, and increases compliance costs.   Second, the Anti-Foreign Sanctions Law, adopted in June 2021 and updated in 2024 has also primarily been used to limit the activities of U.S. defense firms. In addition, it has been invoked to sanction researchers and officials accused of interfering in China’s internal affairs. Third, the Export Control Law, in force since December 2020 provides the legal basis for restricting exports of dual-use, military, and other sensitive goods. It authorizes reciprocal measures against countries imposing export controls on China and enables targeted restrictions through an export control list. So far, this list has similarly been used against US defense companies in particular. While China has shown a growing willingness to impose costs on foreign firms, much of this remains largely symbolic. Many of the targeted U.S. defense companies have limited or no commercial presence in China, while most sanctioned individuals have no business there. Even so, the system is expanding, and authorities have wide discretion in how they apply the available tools. For companies at risk, the landscape remains unpredictable. A spike in geopolitical tensions can trigger any combination of trade restrictions, regulatory probes, or legal designations. Key Issues A fragile truce in the U.S.-China trade war The second U.S.–China trade war, which began escalating on 2 February 2025 as President Donald Trump imposed a ten percent tariff hike on Chinese goods, served as the first major test of China’s expanded economic coercion toolkit. Over the following months, Washington rolled out further measures, including a sweeping “Liberation Day” tariff package. Following several rounds of retaliation from Beijing, U.S. tariffs on Chinese goods had climbed to at least 145 percent.   Unlike during Trump’s first term, China entered this trade war well prepared. It responded not only with its own tariff increases – raising duties on U.S. goods to 125 percent – but also with a wide array of non-tariff measures. These included import suspensions on selected U.S. products such as logs, poultry, soybeans, and Boeing jets, and a reduction in imports of American films. Authorities also issued a travel warning, launched anti-monopoly investigations into Google and DuPont, anti-dumping probes into U.S.-made optical fibers, and placed several U.S. defense firms as well as Illumina and PVH Group on its Unreliable Entity List.   Among the many actions taken, China’s export controls on critical raw materials appears to have made the strongest impression on the Trump administration. These were deployed in two salvos. On 4 February, Beijing announced new licensing requirements for five key minerals: tungsten, tellurium, bismuth, molybdenum, and indium. A second round followed on 14 March, targeting seven rare earth elements. China’s dominance over the global value chain for these inputs – crucial to defense, high-tech, and clean energy – appears to have spooked not only markets but also the White House.   The U.S. and China eventually came to the negotiating table in Geneva in early May. Prior to the talks, President Trump – after markets reacted severely to his global tariffs – had indicated a willingness to lower tariffs on China. When lead negotiators later reached a 90-day truce, many observers interpreted it as Trump’s failure to uphold the tariff pressure he had so aggressively threatened. The US lowered its tariffs from 145 to 30 percent, while China reduced its own from 125 to 10 percent and pledged to withdraw all non-tariff measures imposed since 2 April. By calling Washington’s bluff, China may have come away with a stronger hand in future talks.   The peace, however, remains fragile. Both sides have accused each other of violating the terms of what was in itself a vaguely worded agreement. While tensions have eased for now, the core issues – chief among them the unresolved trade imbalance – remain unresolved. A renewed confrontation could easily erupt if Trump suddenly deemed the deal insufficient. With only five months into his second administration, uncertainty remains high. For many firms that depend on predictability, Beijing is currently seen as easier to read than Washington. A major sticking point in the relationship are China’s stiffening export controls on critical raw materials. These began to bite in response to U.S. technology measures under the Biden administration and escalated sharply during the current trade war. The new framework imposed by Beijing requires export licenses for sensitive items, often involving extensive paperwork for companies. Despite China’s recent pledge to withdraw non-tariff measures, the two sides have disagreed over what that would mean in practice. The U.S. has pushed for a full resumption of trade flows, while China has insisted on retaining the right to impose controls in cases where exports might contribute to military equipment or be deemed dual-use.   China’s new export control system also appears to haven initially been overwhelmed, with thousands of applications flooding the small office responsible for approvals and causing significant delays. It is impossible to say whether these were a mere coincidence or a calculated strategy. Following bilateral talks in London on 9–10 June, however, Beijing reportedly agreed to allow most critical raw materials to flow again to the United States, though it placed a six-month cap on export licenses. Overall, China’s seemingly successful use of these measures against the U.S. may reinforce its confidence in them – potentially emboldening the country to rely on export controls more frequently in future disputes.   For businesses reliant on rare earth supply chains, China’s export control system is more than just a bureaucratic hurdle. Not only will supply disruptions driven by geopolitical tensions likely increase in the future, but the licensing procedures themselves include demands for sensitive commercial data. According to multiple company reports, the Ministry of Commerce requires information about operations, workforce, end-use applications, production information, and even confidential lists of customers. For now, many businesses appear willing to comply to secure access to the critical materials they depend on. However, this poses severe longer-term risks of handing over strategic information to a government which has long faced criticism for weak intellectual property protections. Some experts have noted that these licensing practices could also improve China’s capacity to exercise economic coercion by allowing it to identify and target chokepoints with greater precision. Washington’s trade war, Brussels’ problem Europe finds itself caught in the crossfire of the U.S.-China trade war. As global deliveries of rare earths and magnets became entangled in Chinese licensing procedures, also some European carmakers and medical equipment producers were reportedly forced to halt production. For unsettled officials in Brussels, this has served as a sharp reminder of how Beijing may respond if the EU aligns more closely with Washington on economic security or imposes further restrictions on Chinese firms. In recent weeks, the EU has moved to bar Chinese medical equipment manufacturers from public procurement tenders and also pursues investigations into Chinese electric vehicle subsidies and other trade practices it considers distortive.   China’s rare earths restrictions have already triggered a counterreaction. At the G7 Summit in Canada in mid-June, European Commission President Ursula von der Leyen gave a remarkably direct speech, bringing a rare earth magnet with her as a symbol. The magnet had been produced in Estonia by a Canadian firm using Australian raw materials, underscoring the kind of supply chain the EU hopes to build to break China’s near monopoly. In her speech, von der Leyen warned that China was “not only using this quasi-monopoly as a bargaining chip, but weaponizing it” to undermine competitors. She recalled how China had previously flooded the market to wipe out rival firms, calling this a pattern of “dominance, dependency, and blackmail”. At the meeting, the G7 also launched a Critical Minerals Action Plan to diversify production and supply of critical minerals, encouraging investments, and promoting innovation. Still, the world remains a long way from meaningfully reducing its reliance on Chinese rare earths and will have to live with that dependence in the near to mid-term. Dozens of new mines are needed globally to reduce dependency from China. The current average time of 15 years between exploration and the start of commercial mining for raw materials alone shows that Chinese dominance will extend far into the future.   Meanwhile, China continues its outreach to Europe. It appears to have exercised restraint in response to the EU’s own recent economic restrictions, likely hoping that escalating U.S. tariffs on the EU will push Brussels closer to Beijing. In a symbolic gesture, China recently lifted sanctions on several members of the European Parliament. But as economists have pointed out, China cannot replace the role of the U.S. economy for Europe. Furthermore, Europe has its own growing list of grievances with Beijing, independent of Washington’s agenda. These include China’s close alignment with Russia and its support of war efforts against Ukraine, as well as a surge in Chinese exports that many deem as flooding the EU market.   For now, China appears to have used export controls primarily for political reasons – as a successful tool to pressure the U.S. into easing its stance on Beijing. While these measures have not yet been actively directed at the EU, Brussels is wise to prepare for the possibility that China could apply similar tactics against European countries or firms. Having discovered a new and effective form of economic leverage, Beijing may not hesitate to deploy it for commercial advantage as well.   In a long history of unequal market conditions, these tools are a new chapter in the massive promotion of Chinese industrial champions against European competitors. The EU, which over the past years has assembled its own toolbox of trade defense instruments, will likely soon be tested – not only symbolically, meaning whether Brussels dares deploy its sharper instruments, but also substantially, i.e. whether the latter actually work against China’s tools.

Ischinger: Rezepte für Verhandlungen mit Russland Im MRD Aktuell  Podcast skizziert Botschafter a.D. Prof. Dr. h.c. Wolfgang Ischinger, ehemaliger Vorsitzender der Münchner Sicherheitskonferenz sowie Ehrenvorsitzender des Aufsichtsrats der Agora Strategy Group AG, mögliche Wege für zukünftige Friedensgespräche im Ukraine-Krieg. Botschafter Ischinger betont, dass erste Fortschritte über kleine, konkrete Schritte wie Gefangenenaustausche erzielt werden können. Entscheidend sei, zunächst auf direkte Gespräche zwischen Putin und Selenskyj zu verzichten und stattdessen Unterhändler einzusetzen. Auch eine internationale Kontaktgruppe – ähnlich wie in Bosnien in den 1990ern – könnte neue Impulse bringen. Ein Waffenstillstand müsse zudem vertraglich abgesichert und international kontrolliert werden, um künftige Eskalationen zu verhindern. Für Botschafter Ischinger ist klar: Verhandlungen mit Russland brauchen pragmatische Formate, Realismus und internationale Rückendeckung. Hier geht es zum vollständigen Podcast: https://www.mdr.de/nachrichten/podcast/ukrainekrieg/audio-russland-verhandlungen-frieden-waffenruhe-100.html

Tech-Wettrüsten zwischen China und USA Download des Reports: Zusammenfassung Der Systemwettbewerb zwischen den USA und China bestimmt die aktuelle geopolitische Dynamik, gerade auch in der Hochtechnologie. Dominanz z.B. bei Künstlicher Intelligenz (KI), Quantencomputing und in der Halbleiterproduktion ist zu einem entscheidenden Machtfaktor geworden, der traditionelle Formen internationaler Einflussnahme ergänzt und zum Teil ersetzt. Der weltweite KI-Markt wird bis 2030 voraussichtlich auf rund 1.800 Mrd. USD anwachsen, während der für Halbleiter etwa 1.400 Mrd. USD erreichen könnte. Für Quantencomputing wird ein Volumen von über 60 Mrd. USD prognostiziert. Die beiden Supermächte verfolgen dabei grundlegend verschiedene Innovationsmodelle: Die USA setzen auf privatwirtschaftliche Dynamik und Deregulierung, während China staatlich gelenkte Innovation mit intensivem Marktdruck  kombiniert. Die systemische Konkurrenz um die Kontrolle von Zukunftstechnologien führt zu einer Fragmentierung der globalen Tech-Ökosysteme  und wachsender Komplexität für international agierende Unternehmen. Sie müssen nicht nur unterschiedliche technische Standards umsetzen und mit gegensätzlichen Regulierungsphilosophien umgehen, sondern auch im Wettbewerb um die besten Tech-Talente  erfolgreich sein. Europa versucht, sich mit einer Kombination aus wissenschaftlicher Exzellenz und wertebasierter Regulierung als  dritter Pol  zu positionieren. So bietet das 2024 verabschiedete weltweit erste KI-Gesetz (AI Act) Chancen für differenzierte Wettbewerbsvorteile, birgt aber auch Innovationsrisiken. Bemerkenswerte Entwicklungen wie der chinesische KI-Durchbruch  mit DeepSeek zeigen, dass sich die etablierten finanzintensiven Spielregeln für die KI-Entwicklung ändern – eine Chance für agile europäische Akteure , die ihre industriellen Stärken mit digitaler Innovation verbinden. Europäische Unternehmen  stehen vor der Herausforderung, ihren eigenen Weg in diesem komplexen Umfeld zu finden. Mit den richtigen Strategien – fokussierte Spezialisierung, technologische Autonomie in Schlüsselbereichen, wertebasierte Innovation und aktives Talentmanagement – können sie nicht nur bestehen, sondern gestärkt aus diesem Wettbewerb hervorgehen  – vorausgesetzt es gibt Finanzierung dafür. Handlungsempfehlungen für Unternehmen finden Sie im Report (Download siehe oben)

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.

In the Agora Strategy Group geopolitics podcast “The Future of Power”, Dr. Timo Blenk (CEO) invites decision-makers from diplomacy, business, politics and the military to discuss current geopolitical developments on a monthly basis. The core of this project is to provide information about the influences of these developments and to create a sound basis for decision-making.   This month's guest is Dr. Jürgen Michels, Chief Economist and Head of Research and Economics at BayernLB ! In the 30th episode of our podcast, Dr. Blenk and Dr. Michels talk about the future of financial markets and take a geo-economic look at the world!   This month's highlights Problem Child US: Interest burden, tariffs and FED feud Europa: Between a capital markets union, investment injections and defense spending Geo-Economics Big Picture: The EU in a sandwich, digital tax & oil trade     In-house announcements All other episodes of the podcast Agora Strategy Group website Agora Strategy Group on LinkedIn Current projects, publications & events of the Agora Strategy team Agora Strategy Institute exclusive membership Agora Strategy Executive Briefing: Thailand: Internal Instability and Regional Volatility Agora Strategy Executive Briefing: From Values to Interests: South Korea Recalibrates its Approach   Dean's Comment: Merz Meets Trump: The Art of Expectation Management You can also find our podcast with subtitles on youtube: https://www.youtube.com/watch?v=zxpx3BieBgk

General a.D. Domröse: „Die NATO steht vor einer Mammutaufgabe“ In einem aktuellen Interview mit rbb24 Inforadio  kommentiert General a. D. Hans-Lothar Domröse, ehemaliger NATO-Kommandeur, Viersternegeneral der Bundeswehr und Senior Advisor der Agora Strategy Group AG, die geplanten Beschlüsse des NATO-Gipfels in Den Haag. Aus seiner Sicht stellt die massive Aufrüstung kein Symbol militärischer Aggression dar, sondern eine notwendige Investition in die europäische Sicherheit und Handlungsfähigkeit. Domröse betont, dass die NATO vor einer historischen Herausforderung steht: Bestehende Fähigkeitslücken müssen geschlossen, moderne Technologien wie Drohnensysteme integriert und die militärische Infrastruktur gestärkt werden. Zugleich sei es an der Zeit, die Abhängigkeit von den USA zu verringern und europäische Verteidigungsfähigkeit eigenständig abzusichern. Was auf den ersten Blick nach hohen Kosten klingt, ist laut Domröse ein „Investitionsprogramm in die Sicherheit“. Nur wer heute entschlossen handelt, kann auch in Zukunft souverän leben – und Europas strategische Autonomie nachhaltig stärken. Hier geht es zum vollständigen Interview: https://www.inforadio.de/rubriken/interviews/2025/06/25/nato-gipfel-den-haag-interview-mit-hans-lothar-domroese.html

„Stärkeres Bündnis ist Ziel dieses Gipfels“ – General a.D. Domröse zum NATO-Treffen in Den Haag Zum Auftakt des NATO-Gipfels in Den Haag ordnet General a. D. Hans-Lothar Domröse, ehemaliger NATO-Kommandeur, Viersternegeneral der Bundeswehr und Senior Advisor der Agora Strategy Group AG, die Zielsetzung des Treffens für SWR Aktuell  ein. Für ihn steht fest: Es geht nicht nur um Verteidigungsausgaben – es geht um die Handlungsfähigkeit und Geschlossenheit des transatlantischen Bündnisses. Domröse betont, dass der Gipfel ein klares Signal senden soll: Die NATO will in einer Zeit multipler globaler Krisen als handlungsfähiges, starkes Bündnis auftreten. Er fordert, dass insbesondere Deutschland die Modernisierung seiner Streitkräfte deutlich beschleunigt. Das jahrelange Zögern bei der Erreichung des 2-Prozent-Ziels sei nicht mehr zeitgemäß. Für Domröse ist klar: Wer die transatlantische Sicherheit erhalten will, muss heute konsequent aufrüsten – und Verantwortung innerhalb der Allianz übernehmen. Hier geht es zum vollständigen Interview: https://www.swr.de/swraktuell/radio/nato-general-buendnis-gipfel-trump-israel-iran-ukraine-nahost-waffenruhe-100.html?at_medium=social&at_campaign=info%40swr.de&at_source=whatsapp