Japan and Germany adopt an economic security declaration and sign a chip partnership, as Merz urges caution over Taiwan

The leaders of Japan and Germany adopted an economic security declaration². Takaichi and Merz issued their statement after meeting in Tokyo on Wednesday⁴. On the same day, 28 October, METI and the German Federal Ministry for Economic Affairs and Energy signed a joint semiconductor ecosystem partnership, the Japanese ministry said¹.

Japan and Germany also agreed to launch a new AI dialogue framework³. Merz invited Japan to back a trade alliance, while China asked Germany to be ‘rational’⁵.

Expressing concern over tensions in the Taiwan Strait, Merz urged all parties concerned to exercise caution². The talks were held at a leaders’ summit in Japan⁶, and the declaration was adopted as the two governments also moved on chips and artificial intelligence^1,2,3.

Why it matters to investors

The agreements cover economic security, semiconductors and artificial intelligence in a single summit^1,2,3. The chip partnership is between the two governments’ economy ministries¹. For companies exposed to China, the summit combined three tracks: an economic security declaration², a semiconductor ecosystem partnership¹ and an AI dialogue framework³. Each was agreed bilaterally between Tokyo and Berlin^1,4. Takaichi and Merz met in Tokyo on Wednesday, a day before Taiwan’s foreign ministry thanked both countries^4,6.

The summit took place against a backdrop of trade concerns involving the European Union’s proposed preferential treatment³. Merz’s call for a trade alliance with Japan came as Beijing urged Berlin to be ‘rational’⁵.

Taiwan welcomed the Japan-Germany statement on peace in the Taiwan Strait⁴. Its foreign ministry thanked Japan and Germany for their support a day after Merz and Takaichi met at the leaders’ summit in Japan⁶.

What to watch

The first marker is the content of the semiconductor ecosystem partnership signed by the two ministries¹, and the first meeting of the new AI dialogue³.

The second is whether Japan joins the trade alliance Merz proposed⁵, given the trade concerns over the EU’s proposed preferential treatment³.

The third is China’s response. Beijing has already asked Germany to be ‘rational’⁵, while Taiwan has welcomed the statement on the strait⁴ and thanked both countries⁶. Merz’s call for caution from all parties concerned² sets the tone for how Berlin positions itself. A fourth marker is Taiwan’s own diplomacy, which treated the statement as support from both countries^4,6.