Economic security has become a core element of national strategy for advanced industrial democracies. For Japan and Germany, the shift reflects three developments: pandemic-era disruptions that exposed hidden dependencies; Russia’s full-scale war against Ukraine and its energy and commodity spillovers; and the broader rise of economic pressure as a tool of statecraft, particularly in the Indo-Pacific, including China’s demonstrated willingness to deploy economic leverage for political ends.
More broadly, market access, licensing, logistics, and informal administrative pressure can be used coercively in ways that fall short of formal sanctions while still imposing real costs. The lesson is not that interdependence is inherently harmful, but that unmanaged exposure can be exploited or disrupted. Economic security therefore aims to reduce the most consequential vulnerabilities while preserving the gains of openness, which in turn requires administrative capacity, political sustainability, and partner coordination.
Interoperability Is the Practical Objective
Japan, individual European states, and the European Union approach this challenge from different institutional starting points. Japan has built economic security as an operational agenda between national security and industrial policy, with clear ministerial responsibilities and instruments that engage directly with the private sector. While some states in Europe have followed suit along similar lines, the EU, in contrast, must reconcile single-market governance with national competences and diverging risk preferences across member states.
Yet the direction of travel is similar: reduce exposure to coercion and disruption, secure sensitive technology pathways, and prevent strategic dependencies from turning into political liabilities. Interoperability is the practical objective. In this context, interoperability means three things: compatible risk taxonomies and thresholds, workable procedures for information-sharing and due process, and linked decision pathways for crisis response across jurisdictions. When these elements align, cooperation becomes implementable and predictable for firms, and more credible to actors willing to exploit divisions.
Japan’s Operational Model
Japan’s approach is centered around implementation. In 2022, Japan enacted the Economic Security Promotion Act, which established four systems: ensuring stable supplies of designated critical products; securing the reliability of designated essential infrastructure services; supporting the development of advanced critical technologies; and enabling the non-disclosure of selected patent applications. The defining feature is the administrative logic that links political intent to procedures that can be executed and reviewed.
Japan treats economic security as targeted risk management: Identify areas where markets underprovide resilience, then intervene through incentives, standards, procurement, and governance arrangements designed to be concrete and auditable. This design supports cooperation because partners can coordinate on procedures and measurable outputs rather than rely on broad declarations.
The EU’s approach is more complex by design, but it is also becoming more instrument-driven. The 2023 European Economic Security Strategy framed action under three pillars: promote competitiveness, protect against risks, and partner with like-minded countries. Since then, the EU has worked to operationalize the “protect” pillar through instruments and processes spanning foreign direct investment screening and information exchange, export control coordination, anti-coercion responses, and risk assessments for sensitive technology areas. Work on outbound investment risk, including possible screening or review mechanisms for capital and know-how flows in a narrow set of sensitive technologies, illustrates this shift from general intent to concrete governance. The policy direction is toward a more standardized set of instruments, which can reduce fragmentation if member states align on criteria and implementation, and it provides clearer counterparts for Japan on the European side.
Germany’s Role Shapes the EU’s Coordination Costs
This evolution also highlights internal European coordination costs. EU member states differ in industrial structures, energy transitions, and degrees of dependence on external markets and inputs, which translates into an uneven risk tolerance and uneven appetite for controls, subsidies, and compliance burdens.
Germany is central to these trade-offs. As Europe’s largest economy and a manufacturing hub integrated into global value chains, Berlin must reconcile strategic competition with commercial realities while often brokering internal compromises that shape EU-wide credibility. For Japanese policymakers and firms, this has a practical implication: It needs to engage EU institutions on single-market rules, coercion-response instruments, and baseline screening approaches, while working with key member states, especially Germany, on industrial implementation, corporate compliance routines, and sector-specific adjustment support. That allocation of engagement reduces misunderstanding and lowers coordination costs, which is a precondition for durable cooperation.
Bilateral and EU-Level Channels
Japan–Germany cooperation is already moving from alignment to regularized coordination. Leaders confirmed the establishment of bilateral Economic Security Consultations in 2024, followed by meetings in Berlin (November 2024) and Tokyo (October 2025). The consultations have covered economic coercion, supply chain resilience, critical technologies, and implementation challenges. In parallel, Japan–EU cooperation has expanded through regular dialogues and summit-level messaging, including the July 2025 summit in Tokyo. These channels do not guarantee results, but they provide an institutional basis for a narrower, more operational agenda, which is where the largest gains now lie.
A narrower agenda matters because long lists dilute focus and make progress difficult to verify. Japan, Germany, and the EU should concentrate on four workstreams with direct relevance to reduced vulnerability and credible response capacity. Two workstreams deserve priority because they underpin the rest: a shared analytical baseline for identifying vulnerabilities, and a playbook for responding to coercion. Each workstream should produce an output that can be delivered through existing institutions rather than deferred into additional frameworks. The emphasis should remain on practical risk reduction and faster coordination, not on expanding joint statements.
First, align risk taxonomies and the evidence base. Cooperation often stalls because partners use the same terms with different meanings, including criticality, sensitivity, dependency, and resilience. Japan’s operational approach and Europe’s multi-level governance can converge on method by agreeing how to identify and prioritize vulnerabilities. This includes mapping critical dependencies with comparable thresholds, conducting stress tests against disruption scenarios, and identifying high-concentration nodes where substitution is slow or costly.
A pragmatic starting point would be to apply a shared method to a small set of inputs that are economically essential and structurally concentrated, such as selected semiconductor materials or components used in energy-transition technologies, including permanent magnets. The output should be interoperable analytical routines and periodic updates, not a single static report, and it should reduce uncertainty without forcing disclosure of commercially sensitive information. A shared analytical baseline also anchors proportionality, which is essential for legitimacy and political sustainability, and it sets up the next workstream on coercion response.
Second, build a credible playbook for responding to economic coercion. Effective response depends on predictability, speed, and cohesion. The EU has developed a collective response framework, and Japan has experience aligning economic measures with diplomatic messaging under pressure. A joint playbook should clarify early-warning triggers, information-sharing channels, and a menu of proportionate responses, as well as the forms of support governments can provide to affected firms. It should also address the informal and administrative pressure that firms often face first: licensing delays, selective inspections, procurement discrimination, or sudden administrative tightening that is difficult to contest quickly through legal channels. Coordination on public communication is equally operational, because ambiguity can invite probing and division while coordinated signaling can raise expected costs and reduce expected gains for coercive actors. The aim is not escalation, but fewer coercion attempts and lower effectiveness when they occur.
Third, secure advanced-technology ecosystems without undermining innovation. Semiconductors, artificial intelligence, and quantum technologies lie at the intersection of competitiveness and security risk. In these domains, the United States often shapes the baseline through export controls, industrial policy, and supply chain security initiatives. Japan and Europe therefore face a dual requirement: They need to maintain compatibility with US-led measures where necessary to reduce loopholes and avoid compliance fragmentation, while improving predictability through Japan–Europe coordination on implementation.
That coordination should reinforce transatlantic alignment rather than create parallel regimes, while clarifying how controls are applied and how licensing, end-use risk, and research collaboration are handled across jurisdictions. The practical aim should be narrow, risk-based principles: protect genuinely sensitive capabilities, close clear leakage pathways, and keep legitimate innovation and collaboration open where risks are manageable. Because technology governance is implemented in corporate and research settings, structured public–private dialogue is the channel through which rules become workable and unintended consequences are caught early.
Fourth, protect essential infrastructure, data, and research networks. Economic security now includes systems such as undersea cables, cloud services, cross-border data flows, and research ecosystems that enable innovation. Japan and Europe can move from general calls for resilience to implementable safeguards: expectations for security-by-design and lifecycle assurance, common criteria for high-risk partnerships in sensitive research areas, and coordinated incident-response routines for essential digital and physical infrastructure.
A practical entry point is to align baseline assurance requirements for critical operators and government procurement in areas where interoperability and trust are essential, such as cloud service assurance and incident reporting thresholds for critical digital infrastructure. Over time, aligned standards and procurement expectations can reduce dependence by increasing the substitutability of trusted suppliers, strengthening resilience without relying exclusively on restrictive measures.
Costs and Burden-Sharing
Trade-offs are unavoidable, and they require explicit burden-sharing. De-risking raises costs in the short term through supplier diversification, redundancy, higher inventories, and compliance with screening and controls. If governments expect firms to absorb all the costs, the likely outcome is selective compliance and sustained pressure for exemptions. Durability requires time-bound public support that targets systemic vulnerabilities, combined with clear private responsibilities that embed resilience in corporate governance and risk management. Governments can use incentives to accelerate diversification where dependence is most dangerous and use procurement to create predictable demand for trusted suppliers, while firms link procurement, compliance, and security functions to make adjustments implementable. This burden-sharing logic keeps economic security compatible with competitiveness rather than pitting them against each other.
The next step is to convert dialogue into verifiable deliverables. Japan, Germany, and the EU do not need a new architecture; they need evidence that cooperation reduces risk without shutting down legitimate commerce. Three deliverables would demonstrate progress: a shared dependency-mapping methodology applied to a limited set of critical inputs with compatible indicators and a routine for updates; a coercion-response playbook with tested information-sharing channels and a clear pathway from early warning to coordinated signaling and calibrated countermeasures if needed; and a pilot project on trusted technology supply chains in a narrowly defined segment where interdependence is already high and where interoperable standards can reduce systemic risk. These outputs also create clear entry points for business engagement, which is a condition for implementation rather than an add-on.
Deliverables, Not Long Agendas
These deliverables will be difficult to sustain if firms remain passive recipients of government decisions. Economic security is implemented through corporate governance, procurement choices, compliance practices, and engineering decisions, and these are precisely the areas where operational friction or unintended effects surface first. Businesses therefore have a direct interest in shaping workable rules, sharing risk-relevant information through structured formats, and participating in scenario exercises that test whether procedures function under stress. Public–private routines that firms can integrate into normal operations strengthen resilience more reliably than ad hoc crisis coordination and provide the feedback loops needed to keep measures targeted and legitimate.
Economic security cooperation between Japan and Europe is now an operational requirement for preserving openness on safer terms. Germany is a central actor within Europe, and Japan is a key partner in the Indo-Pacific. The strategic objective is joint resilience that is credible to coercive actors, workable for firms, and compatible with democratic governance. If Japan, Germany, and the EU can translate a shared diagnosis into interoperable instruments and sustained public–private routines, they will reduce vulnerabilities while supporting a rules-based international economic order that underpins their prosperity.
Takahiro Tsuchiya is a professor at Kyoto University of Foreign Studies, specializing in economic security and emerging technology governance.
