Germany and Japan strengthen economic ties as global tensions rise

Germany and Japan agreed to make their economies and technologies more resilient. Their plan covers supply-chain monitoring, critical materials, semiconductors, batteries, electric cars, industrial AI, robotics, pharmaceuticals and wind power. It matters because both countries want to prevent economic dependencies from becoming tools of pressure.

They will examine closer cooperation in key industries and signed a declaration of intent on critical raw materials. They also plan to broaden supplies and make rare earths easier to replace in their automotive industries. A new high-level dialogue on artificial intelligence and closer protection against cyberattacks are also planned.

The partnership extends beyond economics. Germany and Japan reaffirmed support for democracy, fair trade, human rights and the rule of law. They will expand military cooperation in the Indo-Pacific, including Germany's first participation in the Japanese-American Keen Sword exercise. Both governments also want stronger cooperation with allies and like-minded states.

Economic security is a country's ability to keep essential supplies, industries and technologies functioning safely. It includes reducing risky dependencies and protecting supply chains from coercion, sudden export restrictions and other disruptions. It is closely linked to national security because economic weakness can limit a government's choices during a crisis.

The Germany-Japan statement focuses on critical raw materials, semiconductors, batteries, pharmaceuticals, robotics and industrial AI. The two countries want to monitor and assess supply chains more closely. They also want broader sources and more substitutes, so one supplier cannot easily disrupt their industries.

This approach reflects a changing security environment. The leaders expressed concern about economic coercion, arbitrary export restrictions and retaliatory measures affecting critical materials. They rejected non-market practices that create overcapacity and distort markets. Their cooperation aims to strengthen resilience while supporting national security, technological capacity and independent decision-making.

Germany and Japan are committing different amounts and using different investment goals. Germany plans to invest two billion euros in artificial intelligence and high technology by 2029. Japan is aiming for around 18 billion euros in private investment in these areas by 2040.

The figures show that both governments see advanced technology as strategically important. The wider partnership includes industrial AI, robotics, semiconductors and other high-tech fields. Germany's plan is described as national investment, while Japan's figure specifically concerns private investment. The time periods also differ, so the amounts are not directly comparable.

The investment plans support the countries' broader economic-security strategy. They want stronger domestic capabilities and closer cooperation with partners. Japan is also promoting its semiconductor industry through extensive state subsidies. Germany and Japan's work on AI, cyber protection and future technologies is therefore tied to both economic resilience and geopolitical competition.

Germany and Japan are trying to protect industries that depend on reliable supplies, advanced technology and stable trade. Their cooperation targets both resources, such as critical raw materials and rare earths, and industries, such as semiconductors, batteries and electric vehicles. These sectors are important to their economic security and resilience.

The leaders welcomed a joint declaration of intent on critical raw materials. They plan to broaden the supply base and improve the substitutability of rare earths in both countries' automotive industries. They will also monitor supply chains more closely, helping identify dependencies before they become severe vulnerabilities.

The cooperation reaches beyond cars and materials. The countries are examining work in industrial AI, robotics, pharmaceuticals and wind power. They also agreed to establish a high-level AI dialogue and improve cyberattack protection. Together, these measures could give both economies more reliable access to essential resources and technologies.

When a country restricts exports of critical materials, buyers may suddenly struggle to obtain the inputs needed for manufacturing. Supply bottlenecks can delay production, weaken industries and make economies more vulnerable. The disruption is especially serious when few alternative suppliers or substitute materials exist.

The article gives Japan's rare-earth problem as an example. Japan faced supply bottlenecks after China restricted exports of several important raw materials. Germany and Japan therefore want to broaden their supply base and improve the substitutability of rare earths used in their automotive industries. These steps reduce the effect of one country's export decision.

Export controls can also become political leverage. The joint statement refers to economic coercion, arbitrary export restrictions and retaliatory measures affecting critical raw materials. By monitoring supply chains and cooperating on resources and technology, Germany and Japan hope to prevent economic dependencies from being abused as tools of pressure.

Germany and Japan are reducing dependence on China because they see concentrated supply chains as a security risk. The article says Japan faced bottlenecks after China restricted exports of important raw materials. Germany is guided by an EU requirement that no more than 65 percent of critical raw materials should come from China by 2030.

Supply-chain dependence becomes political leverage when a supplier controls goods that another country urgently needs. Export restrictions or retaliatory measures can then disrupt production and pressure governments. The joint statement describes this as economic coercion and rejects non-market practices that create overcapacity or distort markets.

The two countries plan to monitor supply chains, broaden their supply base and develop substitutes. They are focusing on rare earths, semiconductors, batteries, electric cars and other strategic sectors. This diversification is still developing, but closer German-Japanese cooperation could reduce exposure and give both governments more freedom during future disputes.

A rules-based global trading system is trade organized around international agreements, predictable standards and fair competition. Countries accept common rules instead of using economic power whenever they want to pressure partners or rivals. Such a system matters because businesses and governments need stable access to markets and supplies.

The leaders criticized arbitrary export restrictions, retaliatory measures and non-market practices that cause overcapacity and market distortions. At a Tokyo economic forum, Friedrich Merz called for a new political alliance to strengthen rules-based global trade. He said it could defend and further develop trade based on international agreements.

The proposed alliance could also respond jointly when the rules-based order comes under threat. Germany and Japan linked this goal to freedom, democracy, fair trade, the rule of law and human rights. Their broader cooperation suggests that trade policy, economic resilience and political security are increasingly connected.