German companies have maintained a foothold in Argentina since the mid-19th century, beginning with Siemens’ installation of a telegraph network along the railway. Over the years, their presence has expanded significantly, particularly in the automotive manufacturing sector with companies such as Volkswagen, BMW, and Audi, alongside notable advancements in chemicals and pharmaceuticals represented by Bayer and BASF. Recent global developments may further amplify it. Geopolitical shifts, including Russia’s invasion of Ukraine, Donald Trump’s potential return to the U.S. presidency, and ongoing conflicts in the Middle East, have heightened the interest among German companies in expanding their operations within the country. The agreement between the European Union and Mercosur presents an additional attractive element. Their primary focus lies in sectors deemed strategic, including minerals, energy, and agribusiness. There are, however, impediments to tangible investments: political uncertainty in the lead-up to the 2027 presidential elections and the increasing country risk associated with Argentina.
“Argentina has opened up to the world, and I believe good partnerships can emerge from that. It will be one of the central focuses of my work here,” German ambassador Catalina Cullas said at an event at the German embassy. German companies are demonstrating a notable “interest,” especially in sectors associated with mining, energy, and agriculture. Cullas expressed optimism that these key sectors could “give a boost” to the rest of the economy. “There is a lot to be done in industrial production, which is where German companies have a lot to offer,” she stated, noting that three factors are conducive to enhancing trade relations between the two nations. The first is “the opening of the Argentine market and the improvement in macroeconomic indicators” since President Milei took office. The second is interest in Europe – and Germany specifically – in diversifying investments due to the “geopolitical situation.” The third factor is the EU-Mercosur deal, with its trade-only segment finally approved by both blocs earlier this year after more than two decades of negotiations.
Cullas, however, also recognised the obstacles that lie ahead. “Companies need, of course, predictability; they need to be able to plan. Country risk in Argentina remains high.” Julieta Barra, foreign trade manager at the German-Argentine Chamber of Industry and Commerce (AHK Argentina) and one of the speakers at the event, noted that the aspiration for economic stability is a common sentiment among business communities, “regardless of the country.” German companies operating in Argentina maintain a perspective characterised by a significant long-term outlook, with many having established their presence in the country for over a century. “Those that have been here for many years have already experienced many of these ups and downs, and they have teams in the country that are accustomed to finding solutions to these challenges,” she told. Barra nevertheless acknowledged that operating in a market with “prospects and clear rules” is a “priority” for German companies.
When questioned regarding the rivalry between German subsidiaries and Chinese imports, she downplayed the concern, asserting that “it is part of an international trend.” Concerning the EU-Mercosur agreement, she remarked that it is yet to be determined if the accord will facilitate access to product or service sectors where the two nations have previously encountered restricted commercial engagement. “Germany brings considerable expertise in environmentally important technologies, as well as in energy efficiency, innovation, automation, and digitalization,” she said. This could help Argentine industry “make the productive leap it now needs after the market has opened up.” Hans-Dieter Holtzmann stated that Germany requires “new friends around the world” due to geopolitical volatility and “the economic challenges” it engenders. He stated that the previous arrangement, in which the U.S. ensured Germany’s security, China purchased its automobiles, and Russia delivered inexpensive petrol, has come to an end. “We have become too dependent on the unpredictable shifts in the United States,” he said, adding that the German economy is vulnerable to “blackmail” by China while also depending on Chinese inputs. “This is especially true when it comes to the supply of raw materials and rare earths,” the economist said.
This amplifies the necessity to “find new allies around the world” and elucidates the rising interest in Argentina. Concerning energy supplies, Holtzmann remarked that Germany “depends too heavily” on Russia. “Companies and citizens are paying the price through extremely high energy costs, which affect Germany’s competitiveness and households.” The conflict in the Middle East, coupled with what he termed as “serious and misguided decisions,” has exacerbated Germany’s energy-security challenges. He characterised an agreement signed by Germany and Argentina for the supply of 2 million tonnes of liquefied natural gas over eight years as “a good sign,” with deliveries anticipated to commence by the end of 2027. “It is good for Germany in terms of diversification, but it also gives Argentina the opportunity to become a kind of gateway and build trust, precisely when it comes to its ability to supply [energy],” he said, adding that Argentina’s raw materials and Germany’s technology represent a “highly complementary” model for mutually beneficial trade relations. “It is not just about exporting raw materials [but also] generating added value here and creating local jobs.”
