When you think of German engineering in America, you might picture a sleek BMW (maybe even as an EV model) gliding down a California highway — but perhaps you should also imagine a Siemens-built light rail train cruising through Sacramento instead. After all, Siemens’ rail manufacturing plant in California is one of the largest of its kind in the United States, producing trains that connect communities across the country.
It’s a powerful symbol of German investment in America — innovative, forward-looking, and deeply integrated into local economies.
As John F. Kennedy once observed, “Geography has made us neighbors. History has made us friends. Economics has made us partners.” That partnership is alive and well today — and nowhere more so than here in California. German companies have created thousands of jobs in the Golden State, strengthening industries from clean energy to biotech and beyond.
Of course, trade relationships are never without tension. Former German Chancellor Helmut Schmidt once quipped, “Americans will always do the right thing — after exhausting all other possibilities.” And when it comes to tariffs and trade disputes, we’ve certainly tested that theory.
Yet despite political shifts and economic headwinds, the German-American economic bond remains vital — a relationship built not only on goods and services but on shared innovation, investment, and mutual trust. As we navigate new challenges, including evolving (and completely unnecessary) tariff debates, one truth endures: Our economies thrive best when we collaborate and avoid the mistake of falling into zero-sum thinking.
The United States and Germany have long shared a robust partnership, grounded in shared democratic values, economic collaboration, and mutual geopolitical interests. As we navigate the complexities of the 21st century, this alliance remains pivotal in addressing global challenges and fostering economic prosperity.
Political Relations: Navigating Recent Turbulence
Recent political developments have tested the resilience of American-German relations. At the 2025 Munich Security Conference, U.S. Vice President JD Vance’s remarks critiquing European NATO allies and expressing support for populist movements sparked controversy among European leaders.
Further straining relations, a contentious meeting in the Oval Office saw President Trump and Vice President Vance openly and publicly argue with Ukrainian President Volodymyr Zelenskyy and calling their support to Ukraine into question — prompting European nations, including the German government, to reassess their security strategies and consider enhancing their defense capabilities independently.
Despite these challenges one has to remember that the enduring alliance between the United States and Germany has historically weathered not similar but other political disagreements. Both nations recognize the importance of collaboration in upholding global stability and democratic values.
Former German Chancellor Angela Merkel once remarked, “Partnership means that we don’t always agree on everything, but that we trust each other to find common ground.” That trust must be key once again in steering both nations through these tensions.
Trade Relations: The Backbone of Economic Prosperity
Economic ties between the U.S. and Germany are foundational to both nations’ prosperity. Germany stands consistently as the U.S.’s largest European trading partner, with bilateral trade amounting to approximately $253 billion in 2024 and the United States pushing China into second place as Germany’s main trading partner.
California plays a significant role in this relationship, exporting goods worth over $6 billion to Germany, including technology, machinery, and agricultural products.
However, the specter of increased tariffs poses a threat to this symbiotic relationship. Such measures will eventually lead to higher consumer prices, disrupted supply chains, and reduced competitiveness for businesses on both sides of the Atlantic. For instance, German automotive exports to the U.S., valued at $30 billion annually, could face significant declines, impacting jobs and economies in both countries.
Major German automotive companies, such as Volkswagen, Mercedes-Benz, BMW and Audi, have established manufacturing plants across various states in the United States. These factories not only employ tens of thousands of American workers but also foster a supply chain of American suppliers and partners. They are a driver of U.S. exports — enhancing the overall competitiveness of the U.S. automotive industry.
Here in California, especially in the Bay Area, German carmakers have established active tech offices to further innovation in that sector. Conversely, U.S. industries reliant on German machinery and components might experience production challenges, leading to potential job losses and decreased economic output. It is imperative that both nations work collaboratively to prevent protectionist policies that could hinder mutual growth.
Economic and Business Presence: A Testament to Mutual Investment
The economic interdependence between the United States and Germany is evident through substantial mutual investments. Over 6,000 German companies operate in the U.S., providing employment to more than 920,000 Americans. In California, German firms have established a strong presence, not only in automotive, but technology in general, and renewable energy, underscoring the state’s appeal as a hub for innovation and business.
Germany is California’s fourth largest investor and one of the state’s largest trading partners. German companies like Siemens, Bayer, Infineon, Zeiss and SAP have established significant operations within the state providing employment opportunities and fostering economic growth. Bosch, a global supplier of technology and services, is currently building a semiconductor factory near Sacramento — a $1.9 billion investment, creating up to 1,700 jobs.
Similarly, American companies have invested heavily in Germany, with over 2,500 U.S. firms employing approximately 300,000 individuals. These investments facilitate the exchange of knowledge, technology and best practices, enriching both economies and fostering a spirit of cooperation.
A Tribute to California: Leading the Charge in Innovation and Sustainability
California’s dynamic economy serves as a beacon of innovation, sustainability, and resilience. As the world’s fifth-largest economy, the state has championed initiatives in technology, green energy and agriculture, setting benchmarks for others to emulate.
German companies have found a natural partner in California, collaborating on projects ranging from electric vehicle development to sustainable farming practices. This synergy has led to job creation, technological advancements, and strengthened cultural ties.
The state’s commitment to environmental sustainability aligns seamlessly with Germany’s “Energiewende” (energy transition) initiative. Joint ventures in renewable energy projects, such as wind and solar power, not only contribute to environmental preservation but also drive economic growth and energy security.
The numerous partnerships (MOUs) and collaborations that California has established with Baden-Württemberg (e.g. co-founding the global “Under2Coalition,” turning 10 this year), Bavaria (e.g. on agri-voltaic) and other German states are a testament of this active commitment and relationship.
Looking Ahead: Embracing Collaboration for a Prosperous Future
In the face of political and economic challenges, the U.S.-German partnership remains a cornerstone of global stability and prosperity. By focusing on shared interests and values, both nations can navigate uncertainties and emerge stronger. As Chancellor Olaf Scholz stated, “The transatlantic partnership is and remains a central pillar of our foreign and security policy. We are committed to this partnership because it is in our mutual interest.”
In conclusion, as we reflect on the enduring (and real!) bonds between our nations, we extend our deepest gratitude to California for its pivotal role in this alliance. The state’s vibrant economy, innovative spirit and commitment to sustainability serve as an inspiration, reminding us of the limitless possibilities that arise when we work together.
Together, we can overcome any obstacle and pave the way for a brighter, more prosperous future. As we look to the future of German-American trade relations, one thing is clear: our economic partnership is far too valuable to be derailed by short-term disputes or shifting political winds. After all, as Albert Einstein once reminded us, “In the middle of every difficulty lies opportunity.”
I would like to sincerely thank the California Chamber of Commerce for giving me the opportunity to share the German perspective on the latest political developments and their potential impact on American-German-Californian economic and trade relations. It is important to highlight not only the challenges we face but also our shared interests and the immense potential that lies in continued and future cooperation.
To be clear: California is a close friend and preferred partner for Germany in all of this. Together — as the third and fifth largest economies in the world — we can and will achieve great things. Tariffs and trade wars, on the other hand, will help no one. Let us focus on building bridges, not barriers.
Oliver Schramm is Consul General of the Federal Republic of Germany in San Francisco.
