German defense supplier Renk threatens US move over German ban on Israel arms exports

German defense contractor Renk is exploring relocating gearbox production to the US to sustain deliveries for Israeli tanks, following Berlin’s embargo on military exports potentially used in Gaza. Chief executive Alexander Sagel emphasized Renk’s “responsibility” to ensure Israel can “maintain its deterrence capabilities,” despite the ban.

The company, valued at €6.3bn, faces profit losses in the mid single-digit millions if the embargo persists, as Israel accounts for 2-3% of its sales. Sagel confirmed Renk’s compliance with German laws but noted a “plan B” to shift production to circumvent restrictions.

Israel relies heavily on tanks for its Gaza offensive, with hundreds of gearboxes still under contract from Renk. Chancellor Merz’s export halt responds to Israel’s planned military expansion in Gaza, which he said complicates ceasefire efforts with Hamas. Sagel acknowledged the moral complexity, stating, “Of course, we see all the discussions about the Gaza Strip,” but insisted on Israel’s broader defense needs.

Renk’s revenues rose 22% to €620mn in 2025’s first half, driven by European defense spending. The potential production shift highlights Renk’s determination to prioritize Israeli contracts, navigating Berlin’s restrictions while sustaining its role in Israel’s armored operations.