As the US presidential election on November 5 draws closer, German companies are making their political preferences known through donations.

According to an analysis by German Foreign Policy, most German companies are backing Donald Trump and other Republican candidates in the US election campaign.

DAX-listed companies Covestro and Heidelberg Materials are among the most vocal in their support, directing more than 80% of their campaign budgets toward Republican candidates. Only Allianz and SAP have leaned more towards Democrats than Republicans.

T-Mobile has spent the most, with over $800,000 allocated to political lobbying. BASF followed with $328,000, Fresenius with $204,000, Siemens with $203,000, and Bayer with $195,000.

German politicians are also engaging with Republicans, particularly those seen as having a “moderating influence” on the protectionist measures Trump is expected to push if re-elected.

While Germany’s Ministry of Economics is reassessing US-German supply chains and exploring alternative suppliers, companies are preparing for the potential need to increase local production in the US.

Millions in lobbying dollars

A majority of German companies are now backing Donald Trump in the 2024 election. While many supported Joe Biden in 2020, as of September 22, donations from these companies—totaling around $2.3 million—are now largely directed towards Republican candidates.

Based on Federal Election Commission figures analyzed by the Center for Responsive Politics, 84.7% of Covestro’s campaign contributions have gone to Republican candidates, up from 78% in 2020. Covestro produces polyurethane and polycarbonate raw materials and has most of its US facilities located in Republican-controlled regions.

Heidelberg Materials followed closely, contributing 83.5% of its donations to Republicans. Bayer (60.3%), Fresenius (60.2%), and BASF (58.9%) also leaned Republican. By contrast, Allianz and SAP supported Democratic candidates with 58% and 54.6% of their contributions, respectively.

Big spender: T-Mobile

As in the 2020 election, T-Mobile has been the biggest spender among German companies.

By October 14, T-Mobile had donated $379,000 to Democratic candidates and $422,000 to Republicans. BASF was the second-largest contributor, giving $135,000 to Democrats and $193,000 to Republicans.

Other notable contributors include Fresenius ($81,000 to Democrats, $123,000 to Republicans), Siemens ($95,000 to Democrats, $108,000 to Republicans), and Bayer ($73,000 to Democrats, $122,000 to Republicans).

Meanwhile, German automakers such as BMW, Mercedes, and Volkswagen, along with Infineon, Munich Re, and Deutsche Bank, made more modest contributions ranging from $0 to $20,000.

German companies set up political action committees for donations

In the US, corporations are not allowed to directly sponsor political parties or candidates; such contributions are only permitted at the local or regional level. As a result, many companies establish Political Action Committees (PACs) to raise funds from their executives and managers.

Bayer, for example, stated: “The Bayer PAC allows employees to collectively donate to candidates who share our interests. Eligible candidates must be familiar with issues affecting the company, chair relevant committees or hold key positions, or represent states where the multinational has subsidiaries.”

Big Pharma vs. Harris

Bayer has expressed dissatisfaction with the Democrats’ healthcare policies, which aim to reduce living costs for Americans. Conservative German media outlets, such as FAZ, have criticized these policies—particularly those targeting high food prices—as “economic populism.” Under the Inflation Reduction Act (IRA), the Biden administration empowered Medicare to negotiate drug discounts with pharmaceutical companies.

In August, President Biden and Vice President Kamala Harris announced significant price reductions for ten commonly used drugs, including Bayer’s blood thinner Xarelto, which dropped from $517 to $197 per month. At a campaign rally in Maryland, Biden declared, “We beat Big Pharma.”

Cooperation with Trump on glyphosate cases

Bayer is also hopeful that a Republican win could aid its efforts to fend off further lawsuits related to glyphosate. The Trump administration had previously intervened in a compensation case in Bayer’s favor during his first term.

The company also expects to benefit from Trump’s plans for deregulating environmental protections. One of Trump’s first acts in office in 2017 was to replace the head of the US Environmental Protection Agency (EPA).

In addition, large corporations such as BASF and Fresenius support the Republicans’ plan to cut corporate taxes from 21% to 15%, in contrast to the Democrats’ proposal to raise the rate to 28%.

The German government’s targeted support for US Democrats

German companies are not exclusively supporting Republicans. Some are backing conservative-leaning factions of the Democratic Party, such as the Blue Dog Coalition and Moderate Democrats.

For example, BASF made one of its largest donations—$8,000—to Democrat Debbie Dingell, who has fought against groundwater contamination caused by BASF’s Wyandotte plant in Michigan.

German companies are also selectively funding Republicans in states where they have operations. This approach aligns with the strategy of Michael Link, the German government’s coordinator for transatlantic cooperation. Link has spent the past two years engaging with Republican governors and senators representing states where major German firms are based. While many of these governors support Trump, they are primarily focused on their own states’ interests and do not want a trade war with Europe, Link explains.

Berlin’s outreach to ‘moderate’ republicans

The German government is working hard to establish connections with Republicans who might temper Trump’s isolationist agenda, writes the Financial Times (FT).

According to the FT, a crisis management group involving Link, officials from the Foreign Office, and staff at the German Embassy in Washington is preparing for a possible change in US leadership.

The German Institute for Economic Research (IW) estimates that Trump’s proposed 60% import tariffs on Chinese goods and 10% tariffs on imports from all other countries could cause Germany’s GDP to shrink by more than 1% by 2028. If China retaliates, the economic impact would be even greater.

Ministry of Economics analyzes supply chains

In response to Trump’s proposed tariffs, Germany’s Federal Ministry of Economics and Technology is reviewing transatlantic supply chains and exploring alternative suppliers for raw materials and high-tech products currently sourced from the US.

German companies in sectors like engineering are also investigating the potential need to shift production to the US. “The trend toward localized production will only intensify,” predicts Christoph Schemionek, a representative of the German Chamber of Industry and Commerce (DIHK) and the Federation of German Industries (BDI) in Washington.

Meanwhile, the EU is preparing its own responses. While seeking a negotiated agreement, the EU stands ready to defend itself if necessary, sources say. The IW foresees “aggressive bilateral negotiations with short-term benefits” as a likely outcome.

The EU has also started compiling a list of US products that could face retaliatory tariffs if negotiations break down.

German defense company Rheinmetall has formed a joint venture with Italian defense group Leonardo to supply more than a thousand main battle tanks and infantry fighting vehicles to the Italian armed forces, in a deal worth €23 billion.

The partnership includes the KF51 Panther main battle tank and the Lynx infantry fighting vehicle, as announced by Rheinmetall on Tuesday. The Panther will be produced in equal parts by Italian companies, Rheinmetall, and its subsidiaries.

This deal is a significant step towards positioning Rheinmetall as one of the world’s largest defense contractors. Recently, Rheinmetall acquired U.S. vehicle specialist Loc Performance Products for $950 million, boosting its share of the U.S. defense market—the world’s largest.

The acquisition increases Rheinmetall’s production capacity in the U.S. and strengthens the group’s ability to secure $60 billion worth of contracts for armored personnel carriers and military trucks for the U.S. armed forces.

Rheinmetall expands into the U.S. defense market

According to German Foreign Policy, Rheinmetall heavily promoted its weapon systems at the U.S. defense trade fair AUSA, which concluded on October 16.

The U.S. remains the world’s largest defense market, and Rheinmetall aims to increase its presence there significantly. The company hopes to secure the tender to replace the Bradley infantry fighting vehicle (IFV), with around 4,000 IFVs worth an estimated $45 billion at stake.

Rheinmetall is also bidding for the Joint Tactical Truck Program, which involves producing 40,000 military trucks at a cost of $16 billion.

In addition, Rheinmetall recently won a contract to produce eight prototypes by 2025 for an unmanned ground vehicle designed to transport supplies and equipment in rough terrain. The company is also collaborating with U.S. firm Honeywell to develop advanced vision systems and auxiliary units for military vehicles.

Critical supply to the Pentagon

Rheinmetall’s acquisition of Loc Performance Products in August significantly improved its chances of winning major U.S. defense contracts, including those for armored personnel carriers and military trucks.

This acquisition is particularly valuable as it brings both new expertise and production capacity to Rheinmetall, enabling the company to comply with U.S. regulations requiring these vehicles to be manufactured domestically.

Rheinmetall states that the acquisition provides “significant capabilities in the U.S.” and enhances its subsidiary, American Rheinmetall Vehicles, to serve the U.S. Department of Defense more effectively.

Strengthening Rheinmetall’s position in Europe

Rheinmetall has also made significant strides in consolidating its dominance in the German and European markets. The Düsseldorf-based company could receive between €30 billion and €40 billion from Germany’s €100 billion defense budget for the Bundeswehr.

Rheinmetall supplies a range of defense products, including €8.5 billion in artillery ammunition, 6,500 military trucks worth €3.5 billion, and 123 vehicles under the “Heavy Infantry Gun Carrier” project, valued at €2.7 billion.

Further orders come from other EU countries, partly driven by the war in Ukraine. For instance, in July, Rheinmetall agreed to supply 14 Leopard 2A4 main battle tanks and three Büffel armored recovery vehicles to the Czech Republic, for delivery to Ukraine.

Lithuania, in parallel with the deployment of the German “Lithuanian Brigade” equipped with Leopard 2A8s, plans to purchase these tanks, in which Rheinmetall is involved. Denmark has also ordered 16 Skyranger 30 turrets from Rheinmetall for its air defense system.

Rheinmetall’s joint venture with Leonardo

On Tuesday, Rheinmetall announced its next step in penetrating the international tank market through a joint venture with Leonardo. This collaboration will produce the KF51 Panther, which is still under development, and supply the Italian army with both the Panther and the Lynx IFV.

In total, over a thousand tanks will be delivered to the Italian armed forces under the €23 billion contract. The joint venture is split 50-50 between Rheinmetall and Leonardo, with 60% of the Panther’s production to take place in Italy, and 40% in Rheinmetall’s German plants. Of the Italian portion, 10% will be managed by Italian Rheinmetall branches, ensuring equal distribution of sales.

Funding for AI subsidiary

Rheinmetall’s subsidiary, YardStick Robotics, specializing in AI-controlled robots, and Rheinmetall Waffe Munition, received €1.4 million in funding for the ‘RoX’ research project. This project, supported by the German Federal Ministry of Economics and Climate Protection, has a total budget of €52 million.

YardStick Robotics aims to advance AI-driven robotic systems for industries such as manufacturing, logistics, and services. Earlier this year, it secured €3.2 million for its ‘Robot-X’ project under the Manufacturing-X initiative, furthering research in AI-based automation.

Franco-German partnership falters

Italy initially planned to purchase Leopard battle tanks from KNDS, a Franco-German joint venture between Krauss-Maffei Wegmann (KMW) and French tank maker Nexter, which uses parts from Rheinmetall. However, disputes within KNDS delayed the project, and Italy opted to proceed with Rheinmetall and Leonardo instead.

This move provides KNDS with new competition in the German and EU defense markets.

Rheinmetall’s role in NATO

By expanding into both the U.S. and European defense markets, Rheinmetall is securing its position as a major pillar of NATO’s defense industrial base. U.S. defense contractors have taken notice, with Rheinmetall also contributing to the production of F-35 fuselage components.

Reflecting the importance of its U.S. business, around one-fifth of Rheinmetall shares are held by U.S. investors, including BlackRock, Goldman Sachs, and Bank of America.

A group of civil society organizations has criticized the European Union’s ‘Global Gateway’ initiative, designed to counter China’s Belt and Road Initiative (BRI), as ‘neo-colonialist’ and ‘too pro-business.’

Launched by the European Commission in 2021, the Global Gateway aims to offer countries in the ‘Global South’ a ‘sustainable and transparent investment alternative’ to China’s BRI. By 2027, the EU plans to mobilize €300 billion for investment in infrastructure such as submarine cables, transport networks, and renewable energy, while also promoting reforms that facilitate market access for European companies.

Officially, the Global Gateway is presented as a ‘win-win partnership’ between countries in the ‘Global South’ and European companies. However, a report published last week (8 October) by NGOs, including Counter Balance, Eurodad, and Oxfam, titled Who Profits from the Global Gateway? raises concerns.

European monopolies dominate Global Gateway fund management

“When we think about the Global Gateway, it almost looks like a black box with too much branding,” said Farwa Sial at the launch of the report.

The NGOs particularly criticize the influence of large European companies in fund management and the lack of transparency in decision-making and judicial arbitration, with the Global Gateway Business Advisory Group playing a central role. This group primarily consists of economic actors from Western European countries like Germany, France, Italy, Belgium, and Spain, including companies such as Total Energies and Bayer. Many of these companies also have historical ties to ‘partner countries’ in the Global South, dating back to colonial times.

A new version of the Berlin Conference on the division of Africa

“If you really want to know which companies are active where, just look at who the colonial powers are,” said Paul Okumu, head of the African Platform secretariat, at the same conference. “Germany still wants to do projects in its former colonies. In my country [Kenya], the British are still in control.”

For Okumu, the link between the projects selected by the Global Gateway and the companies’ countries of origin is reminiscent of the Berlin Conference (1884-1885), when European powers carved up Africa. “Basically, what we are doing is Berlin 2.0: dividing the continent into different countries and allocating projects to them,” he argued, suggesting that European countries are repeating the colonial process under the guise of the Global Gateway.

The issue of Africa’s division among imperialist countries in the 19th century, often referred to as the ‘Scramble for Africa,’ seemed to have been resolved with the Berlin Conference. Yet, the decisions made there did not prevent the colonial powers from clashing over their territorial ambitions.

Concerns about deepening debt and inequality

NGOs are concerned that the Global Gateway initiative could exacerbate the debt crisis in some countries.

“We analyzed [this fund’s partner countries] and found that 29 out of 37 are highly indebted poor countries,” said Alexandra Gerasimcikova, co-author of the report and head of policy and advocacy at Counter Balance. “Such projects are really risky,” she added, warning that they could further increase the debt burden on countries already facing serious financial challenges.

Commission representative: Grants alone cannot eradicate poverty

The question of whether loans or grants are the better form of financing sparked a debate between the European Commission representative and the civil society organizations at the report’s presentation.

According to Marlene Holzner, head of unit in the Commission’s Directorate-General for International Partnerships, the Global Gateway seeks new approaches, such as involving the private sector and banks in supporting the development of countries in the ‘Global South.’

“For the last 50 years or more, we have not been able to reduce poverty with the traditional approach of ‘I give you a grant, you get a gift, you don’t have to pay it back.’ […] We need to change our perspective. The Global Gateway is designed to be a paradigm shift, and we are acting based on what we have learned.”

Proposal for a new ‘Marshall Plan’

Criticizing the lack of political will to address global poverty, Sial proposed a new reconstruction plan modeled on the Marshall Plan, which helped rebuild Europe after World War II.

“In my view, the Marshall Plan was based on grants and soft loans, and that is what got Europe back on its feet,” Sial said. “If we really want to make such an offer to the world, I believe it is possible. The money is there, and we can do it.”

Global Gateway criticized for ‘protecting Europe’s strategic interests’

However, the idea of Marshall Plan-style funding did not garner unanimous support from all NGO representatives.

“In this room, we glorify grants. But there is nothing more absurd than giving me $70 billion and taking $480 billion from my continent,” said Okumu.

He argued that the problem lies in the fact that the ‘development fund’ primarily serves to protect Europe’s strategic interests and maintain the competitiveness of its companies. “When you look at policies like the Critical Commodities Act and the Green Deal, they fit perfectly into the Global Gateway,” Okumu noted.