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#Donald Trump: Is a foothold in the United States worth it for the German Mittelstand?

Interview with Sven Gerzer, Vice president of the Chamber of Commerce in Charlotte

The United States is one of the most important markets for German companies in general and for the German Mittelstand in particular. This is reflected by the numerous German subsidiaries, branch offices and representative offices in that country. The Charlotte metropolitan area has become a magnet for German Mittelstand companies. More than 300 companies from the German-speaking countries have set up shop there. This is also borne out by the Chamber of Commerce in Charlotte. Sven Gerzer, the Vice President of the Chamber, is the primary contact person for German and other European companies. His main focus is on assisting German companies set up their US location. We asked Mr. Gerzer how the economic conditions and climate have changed in the Charlotte area since the presidential elections in November 2016.

Mr. Ger­zer, the Char­lotte Cham­ber of Com­merce helps Ger­man com­pa­nies set up shop in the Uni­ted Sta­tes, spe­ci­fi­cally in the Char­lotte metro­po­li­tan area. How can you help?

We can assist with all aspects of set­ting up shop and gro­wing your busi­ness in Char­lotte. We can first pro­vide all infor­ma­tion about Char­lotte as a place to do busi­ness: from data and sta­tistics to taxes, costs, emp­loyee qua­li­fi­ca­ti­ons and wage costs to infor­ma­tion on real estate and lists of various indu­s­tries, we have all the infor­ma­tion nee­ded to eva­luate the Char­lotte area as a busi­ness loca­tion. We then orga­nize a visit to Char­lotte, with appo­int­ments with ser­vice pro­vi­ders, other local Ger­man com­pa­nies, and com­mer­cial and resi­den­tial real estate agents. The third step inclu­des assi­s­tance with set­ting up shop and growth, inclu­ding inte­g­ra­tion into exis­ting net­works. It is all con­fi­den­tial and free of charge.

#Donald Trump: Is a foothold in the United States worth it for the German Mittelstand?© Sven Gerzer, Vice president of the Chamber of Commernce in Charlotte

What are the typi­cal issues facing Ger­man inve­s­tors in the Uni­ted Sta­tes?

The first ques­ti­ons are usually how to invest in the Uni­ted Sta­tes and how much it will cost. The second prio­rity is then issues such as pro­ducts lia­bi­lity, visa issues, taxes, logistics and emp­loyee relo­ca­tion. But because there is an excel­lent sup­port net­work in Char­lotte, as in the rest of the Uni­ted Sta­tes, these issues can be dealt with rela­ti­vely quickly so that inve­s­tors can focus on their main task, which is acqui­ring new custo­mers.

"Ame­rica first," eco­no­mic pro­tec­tio­nism, bor­der con­trols and tax reform - just to name a few of the hot politi­cal topics in the Uni­ted Sta­tes. How do you think they will affect the invest­ment cli­mate in Char­lotte? Has the num­ber of new busi­nes­ses sett­ling in the region dec­rea­sed or inc­rea­sed?

Thus far the new admi­ni­s­t­ra­tion in the US has not had any effect on the Ger­man com­munity or the num­ber of Ger­man com­pa­nies set­ting up shop in the region. Many of the issues rai­sed by Pre­si­dent Trump have eit­her been stop­ped by the courts or the Con­gress, or Pre­si­dent Trump has chan­ged his mind in the meantime. Exam­p­les of this include health­care reform - stop­ped by Con­gress and being rene­go­tia­ted, the pro­hi­bi­tion on visas for seven Mus­lim coun­tries - stop­ped by the courts; the wall on the bor­der to Mexico - not fun­ded by the Con­gress; the dis­so­lu­tion of NAFTA - toned down by Pre­si­dent Trump in rene­go­tia­ti­ons; the dis­so­lu­tion of NATO - a 180 deg­ree turn by Pre­si­dent Trump. There are many more exam­p­les like these. So far it is not­hing more than rhe­to­ric and has had no major effects on Ger­man com­pa­nies in the Uni­ted Sta­tes. There will cer­tainly be a tax reform, but it will not be as com­pre­hen­sive as repor­ted by the media. But this is a posi­tive fac­tor for Ger­man invest­ments in the Uni­ted Sta­tes, since it will reduce their tax bur­den.

In what areas are for­eign com­pa­nies in gene­ral and Ger­man com­pa­nies in parti­cu­lar now faced by grea­ter chal­len­ges than before?

The big­gest chal­lenge is pro­bably the lack of pre­dic­ta­bi­lity. How politics will affect com­pa­nies in the future and what else will hap­pen are big ques­ti­ons that no one can curr­ently ans­wer.

How can com­pa­nies pre­pare for this?

Making plans and doing your home­work are key. When you are well pre­pa­red, have gathe­red all necessary infor­ma­tion and put toge­ther a good team of pro­vi­ders, you should be pre­pa­red to mas­ter the addi­tio­nal chal­len­ges.

In view of these rather unsett­led times, how would you advise Ger­man com­pa­nies? Invest now, or wait awhile?

The Ame­ri­can mar­ket was, is and will be a very large mar­ket for Ger­man com­pa­nies. The Ame­ri­can sys­tem of sepa­ra­tion of powers works, and it is important not to pay too much atten­tion to media reports. It is cer­tainly important to remain infor­med, but the media hype should not have any effect on busi­ness inte­rests. Someone who invests in the Uni­ted Sta­tes does so because the mar­ket or poten­tial mar­ket is pre­sent, not for politi­cal rea­sons. In any event I would not let a few politi­ci­ans scare me off, but would ins­tead fol­low the motto "busi­ness is busi­ness" and would rely on the assi­s­tance of sup­p­liers and busi­ness pro­mo­tion agen­cies.


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