“Geopolitical risks are always on the agenda for supervisory boards.”

Economic freedom increasingly plays second fiddle to geopolitical objectives in competitive international markets. This was the subject of the morning podium discussion. Prof. Dr. Gabriel Felbermayr, Director of the Austrian Institute of Economic Research (WIFO), began by taking aim at the World Trade Organisation (WHO) – with something that sounded almost like an obituary. He stated that there are not many positive things to say about international trade and the WHO – and that the spirit of the WHO is no longer as inspirational as it was. “It lost the support of the USA even before Trump,” he said, adding that the re-election of Donald Trump in 2024 would further exacerbate this situation. “The Trump campaign manifesto calls for the introduction of a 10% baseline tariff on all US imports. There is no growth to be found by exporting to the USA.”

Margret Suckale, Supervisory Board member at several companies including Infineon Technologies, supported this view: “Trump will likely be re-elected – and I’m not reading enough about that in the newspapers.” She emphasised that companies are already looking very closely at these events, as they are by no means extreme ‘black swan’ events but are well within the bounds of probability. “A go-west strategy could bring major disappointment. Biden is also pursuing America First policies that will only intensify further under Trump.” The member of several supervisory boards does not think much of the USA’s decision to turn away from China, saying: “Only three percent of companies want to scale back their presence in this market – it is much more sensible to be there.” In her experience, China is rolling out the red carpet for companies, something that is “very much not the case here”. Suckale added that every company is naturally keeping an eye on the risk from China, saying: “Geopolitical risks are always on the agenda for supervisory boards.”

Prof. Dr. Hermann Simon, founder of Simon-Kucher & Partners, shifted the focus of the discussion onto Germany’s strengths, emphasising that Apple has 767 suppliers in the country. He reported that China is massively dependent on Europe, citing optical lithography systems as one example, and that Chinese automotive suppliers are on the verge of a massive wave of investment in Germany, saying: “We are experiencing a complete reorientation of global value creation.” He explained that foreign firms are stepping up production in Germany in order to sell their products here. The reverse is also true, as illustrated by Simon’s specific examples: one mining technology company is relocating its entire value chain to China because mining is still taking place there, while another is setting up an AI development centre in China. “This demonstrates that economic regions are becoming increasingly interwoven.”

All in all, the podium ended on an extremely positive note. Felbermayr: “Our reliance on others is greatly exaggerated. It is much easier to find replacement suppliers when needed than previously thought.” Suckale: “We have something to offer, we have technology that the Chinese don’t have, and we are in a much more robust position than we think.” Simon: “Toyota-style mass-produced goods versus advanced German technology of the kind produced by Trumpf – that is our leverage.”