EU Plans New Rules to Cut Dependence on Chinese Suppliers

The European Union is preparing new rules to reduce European companies’ dependence on Chinese suppliers of strategic components. According to the Financial Times, Brussels is considering requiring firms in key sectors to buy parts from at least three suppliers based in different countries.

The measures could particularly affect the chemical industry, machinery manufacturers and other strategic sectors. Under the proposal, companies would not be allowed to source more than around 30%–40% of components from a single supplier. The aim is to reduce risks linked to China’s dominance in critical raw materials and technologies.

Brussels is also responding to growing concerns that Beijing is using its control over the processing of several strategic minerals as a geopolitical weapon. The materials are important for the production of semiconductors, electric vehicles and advanced weapons.

European Trade Commissioner Maros Sefcovic is also preparing new tariffs on Chinese chemicals and industrial machinery. The EU is seeking to address both its large trade deficit with China and the risks created by excessive dependence on a single market.

Last month, Sefcovic signed a memorandum of understanding with the US on cooperation in securing critical minerals. The European Commission is expected to discuss the planned measures at the end of May, and final decisions could be taken at an EU leaders’ summit in June.

(reuters, max)