Geopolitical Tensions Increase Risks for German Economy
The start of 2026 is marked by rising geopolitical tensions. According to Atradius, this increases risks for the German economy, particularly in internationally networked sectors.
The beginning of 2026 is characterized by heightened geopolitical tensions, increasing risks for the German economy, especially within its internationally networked sectors. Credit insurer Atradius points out that companies' predictability is diminishing as global events, such as U.S. actions in Venezuela, sovereignty debates around Greenland, protests in Iran, and the China-Taiwan conflict, impact supply chains, energy supply, and investment decisions.
"For companies, predictability is increasingly becoming an exception. Geopolitical decisions can influence supply chains, energy supply, and investment decisions at short notice," stated Frank Liebold, Country Director Germany at Atradius. While direct economic ties between Germany and Venezuela are limited, uncertainties in oil-producing regions increase volatility in energy markets, affecting energy-intensive industries and raising cost pressures.
Particularly significant risks stem from the situation in Taiwan, a hub for the global semiconductor industry. Approximately 90 percent of the most advanced chips are manufactured there and are crucial for Germany's automotive, mechanical engineering, and electronics industries. Disruptions in chip supply could severely impact production and costs. Industrial companies are advised to prepare with alternative sourcing strategies and risk management.
As geopolitical conflicts escalate, economic planning becomes more challenging, affecting corporate financial stability and payment capacity. Atradius urges companies to adapt to ongoing geopolitical risks and strengthen the resilience and diversification of their supply chains.