What’s next for foreign trade? The plans in the 2025 coalition agreement

Foreign trade and foreign trade have become particularly explosive in view of the new US tariffs. The CDU/CSU and SPD have agreed on the following measures in the coalition agreement:

Trade treaties and agreements

The “EU-only” principle should apply to trade agreements. This refers to the conclusion of trade agreements by the EU alone, without the individual member states becoming contracting parties. The coalition partners are aiming to conclude further trade and investment agreements. The EU’s framework agreement with Chile, which has already been signed, is to be ratified swiftly. The future government intends to actively support the EU agreements with Mercosur and Mexico in the Council and then ratify them swiftly.

The coalition partners support the conclusion of the current EU free trade negotiations with India, Australia and the ASEAN states. They are aiming for a free trade agreement with the USA in the medium term, while in the short term they want to avoid a trade conflict and are focusing on reducing import duties on both sides of the Atlantic. As part of a new Africa strategy, trade relations with African countries are to be deepened in the long term. The economic partnership agreements with Côte d’Ivoire, Ghana, Cameroon and the SADC EPA states introduced to the Bundestag by the previous government are to be ratified swiftly. The same applies to the investment protection agreements between the EU and Singapore and Vietnam. The EU Commission should take internationally applicable standards into account when negotiating trade agreements.

Reform of the WTO

The coalition partners are committed to maintaining the WTO system. However, they would like to see reforms with regard to the rules for industrial subsidies in order to achieve a global “level playing field”. ‘

Amendment of the Foreign Trade and Payments Act and simplification of export processes

The new government wants to present an amended Foreign Trade and Payments Act in the near future. Review procedures are to be accelerated, simplified and made easier to apply for practitioners. Foreign investments in critical infrastructure and strategically relevant areas that run counter to German interests are to be effectively prevented.

The CDU/CSU and SPD want to simplify and speed up the export licensing process. Instead of end-to-end checks, they are aiming for random checks combined with severe penalties for violations. A prior export license should no longer be required.

The plan to speed up and simplify inspection procedures is to be welcomed in principle. However, the measures envisaged by the future German government for this purpose may be at the expense of market participants. Although the abolition of inspections by the authorities in the approval process will contribute to the simplicity and speed of export procedures, it is also associated with a loss of legal certainty for exporting companies. They will then have to bear the risk of an incorrect interpretation of the already increasingly complicated export regulations themselves. Together with the intended “severe penalties for violations”, this will significantly increase the relevance of export controls for companies. This is all the more true in light of the “Act to amend the Foreign Trade and Payments Act and other legal provisions” currently being discussed in the Bundestag, which is intended to implement the requirements of Directive (EU) 2024/1226, which came into force on May 9, 2024. The amendment to the Foreign Trade and Payments Act already provides for higher overall penalties for sanction violations.

Resilience and cyber security

In response to the changed geopolitical environment, the coalition partners want to strengthen economic security and resilience. They want to implement the European strategy for economic security in a national strategy. The highest security requirements should apply to critical infrastructure components. In sensitive areas of critical infrastructure, only components from trustworthy countries should be allowed to be installed in future. To ensure that German SMEs are better protected against cyber attacks, the future government wants to provide information and support for cyber security measures. Companies are also to receive support in implementing the Cyber Resilience Act.

The Cyber Resilience Act (CRA) came into force on December 10, 2024 and does not generally apply until December 11, 2027. According to the CRA, products with digital elements must be designed, developed and manufactured in such a way that they ensure an appropriate level of cyber security. Processes for reporting and regular updates and support must be implemented.

Sanctions against Russia and Belarus

The sanctions against Russia and Belarus are to be continued. The coalition partners also support the EU’s plans to impose tariffs on the import of fertilizers from Russia and Belarus.
The EU’s sanctions against Russia and Belarus have been significantly tightened since the beginning of 2022 and include – in addition to personal sanctions – comprehensive import and export bans as well as restrictions in the financial and service sectors.

The EU is currently planning to introduce tariffs on a range of agricultural products from Russia and Belarus as well as on certain nitrogen-based fertilizers. This is intended to further reduce dependence on imports from Russia and Belarus.

It remains to be seen whether and to what extent the new German government will work towards a further tightening of sanctions against Russia and Belarus.

Foreign trade promotion

The new government wants to strategically align the instruments of foreign trade promotion and strengthen them financially. The climate policy sector guidelines are to be made more flexible. The German government’s investor conference is intended to send a welcome signal to innovative foreign companies as well as international investors and talent.

China strategy

The future government would like to revise the China strategy according to the principle of “de-risking”. It wants to set up a commission of experts in the Bundestag that will analyze and present risks, dependencies and vulnerabilities in economic relations in an annual report and recommend measures for de-risking.
Companies from China have been considered potentially critical investors in the context of investment control – due to possible government influence – not just since a Chinese state shipping company acquired a stake in a Hamburg container terminal in 2022. For example, the takeover of a German robotics pioneer was already viewed critically by the public in 2016. The German government also prevented a Chinese company from acquiring a stake in a German electricity grid operator in 2018.

It is to be expected that investments by Chinese companies will continue to be subject to particularly critical scrutiny in the future and that any investment review procedures may take longer.