German car makers caught up in China-US 'chip war'

Two British universities claim to know why German firms are refusing to join the US tech trade war with China over semiconductor chips.

King's College London and University of Sussex report links between German car makers – such as Mercedes-Benz, BMW and Volkswagen – and the country's semiconductor firms.

The researchers say that with automotive companies now dependent on Chinese markets and suppliers, this explains why Germany is defying US calls to cut China out of semiconductor supply chains in the ongoing 'chip war'.

Dr Joseph Baines from King's says, 'While the tech conflict is chiefly driven by governments, it is executed through firms, making corporate interests a crucial intervening variable in US attempts to isolate China’s semiconductor industry.'

The study finds, however, that German semiconductor firms are no more dependent on Chinese markets than Japan or South Korea, markets that have supported American efforts and even withdrawn from China. Yet the 'secondary exposure' of other important industries has led to a resistance of the US embargo.

Dr Julian Germann, from the University of Sussex School of Global Studies, adds, 'Germany's semiconductor industry may not be the largest, but its strategic importance to the US-China chip war is undeniable.'