German maker weighs moving production to US amid Israel arms embargo

Germany’s freeze on weapons exports to Israel pushes a German supplier to consider shifting production abroad.

German maker weighs moving production to US amid Israel arms embargo

Germany’s defense supplier Renk is weighing the option of moving production of tank transmissions and engines to the United States after Berlin froze arms exports that could be used in Gaza. On a post earnings call, Renk CEO Alexander Sagel said volumes could relocate if German production cannot continue, a shift he says could take eight to ten months. The move would affect about two to three percent of the company’s business. Germany’s chancellor, Friedrich Merz, announced the freeze on exports until further notice, as Berlin weighs the Gaza crisis and Israel’s military plans. Germany remains Israel’s second-largest weapons supplier, behind the United States, a position that underscores the political stakes of Berlin’s export decisions. The policy arrives amid international condemnation of the Gaza war and raises questions about how allies balance security aims with humanitarian concerns.

The episode shows how policy choices can ripple through industry fast. A single export rule can bend the geography of manufacturing and job security. If Renk shifts work to the US, it could widen the precedent for other German suppliers and complicate Berlin’s effort to maintain strategic ties while enforcing high ethical standards. The case also highlights how public pressure and investor expectations intersect with national security policies in times of crisis.

Highlights

Industry and policy will test Germany’s balance in the weeks ahead.