Our industrial companies and workers are under massive threat from unfair trade practices by China and the U.S. Whether through China’s control of critical raw materials, the capacity of its steel industry—which exceeds total European steel demand by more than four and a half times—or U.S. tariffs, especially since the new administration took office. For over a decade, China has been pursuing a geopolitically motivated industrial and technology strategy. In the area of critical raw materials, this includes targeted pricing and location policies as well as Beijing’s foreign investments.
Resilience begins long before the finished product—it encompasses those strategic bottlenecks that arise both in the supply of raw materials and in components and intermediate goods along the industrial value chain. Key technologies in the EU’s economic security strategy—such as semiconductors, artificial intelligence, quantum technology, and biotechnology—are of strategic importance in terms of both security and industrial policy. Only by bundling levers such as energy policy, regulation, and trade policy within a European regulatory framework can Europe’s technological resilience be strengthened and the competitiveness of its industrial base be secured in the long term.
Policymakers and the business community must be made aware of these risks. Rules-based global competition is at risk. For Germany and its partners, industrial resilience must therefore be given the highest priority. The security and prosperity of our country stand or fall on market-based access to raw materials and processing capacities, to intermediate and final products, and to reliable supply and production chains.
The study commissioned by the “Future of Industry” network makes it clear that the government, companies, and employees are indeed striving for resilience. However, without coordination of the various activities, we remain highly vulnerable. It is welcome news that the new coalition intends to support further EU trade and investment agreements and pursue a policy of de-risking to increase resilience vis-à-vis China. However, narrowing the focus to China and concentrating on individual measures does not go far enough. Furthermore, it remains unclear how dependencies and risks are to be reduced. A structured dialogue is needed among the federal government, the states, companies, unions, and industry associations so that the various processes interlock and lead to tangible measures. This dialogue must be initiated by the new federal government. We are ready to cooperate.
The study confirms that growing demand for raw materials and high dependence on imports threaten to become the Achilles’ heel of industrial development in Germany and Europe. The race for strategically important raw materials—especially for renewable energy plants, storage technologies, and semiconductors, but also for the modern security and defense industries—has long since begun. Germany and Europe are at risk of falling behind. The markets are largely divided.
To achieve climate and digital goals, build credible military defense capabilities, and reduce dependencies, Germany and Europe must therefore diversify and invest heavily in domestic extraction, processing, and recovery of critical raw materials, as well as in circular value creation. Germany’s position as a business location must be strengthened by improving the framework conditions for planning and permitting procedures, energy prices, and public promotion of domestic production.
We call for the swift and consistent implementation of the EU Critical Raw Materials Act (CRMA) through the execution of strategic projects in European raw materials production. The German government’s raw materials fund should also quickly participate in initial projects. Agreements and strategic partnerships in the area of critical raw materials must be established with resource-rich countries, particularly like-minded ones. Formats such as the Minerals Security Partnership Forum or the Critical Raw Materials Club envisaged in the CRMA should be utilized to promote joint raw materials projects with partners and higher environmental and social standards in the raw materials sectors of partner countries. The dialogue that has begun on strategic reserves within the framework of the CRMA must be swiftly translated into concrete action.
However, the creation of further dependencies must also be consistently countered: industrial value creation that processes critical raw materials in Europe must not continue to relocate or be forced by uncompetitive framework conditions to scale back production or even shut it down entirely. Focusing solely on net-zero industries still falls short here. The industrial sectors at the beginning of the value chain for key technologies are of particular importance (e.g., steel, metal processing, chemicals, glass, ceramics, cement) and must be considered as a central component of the entire value chain, while the industrial sector as a whole must be strengthened.
Click here to access the full study, “Germany’s Industrial Resilience and Strategic Sovereignty.”
