The European Union is preparing measures that would require companies within the bloc to source critical components from at least three separate suppliers, aiming to reduce dependence on China, the Financial Times reported on Monday.
According to the report, which cited two EU officials familiar with the discussions, the proposed rules would apply to several strategic industries, including chemicals and industrial machinery.
Under the new legislation companies would be limited to buying about 30% to 40% of components from a single supplier and would have to source the rest from at least three different suppliers not coming from the same country, the FT said.
Concerns Over China’s Trade Influence
This comes as China continues to use its chokehold on the processing of many minerals as leverage, at times curbing exports, suppressing prices and undercutting other countries’ ability to diversify their sources of the materials used to make semiconductors, electric vehicles and advanced weapons.
European Union Trade Commissioner Maros Sefcovic is planning a series of punitive tariffs on Chinese chemicals and machinery in a bid to tackle the bloc’s 1 billion euro ($1.16 billion) a day trade deficit and insulate companies from China’s “weaponisation of trade,” the newspaper said.
EU-US Partnership and Next Steps
Last month, Sefcovic signed a memorandum of understanding with U.S. Secretary of State Marco Rubio for a partnership on producing and securing critical minerals, as part of a push to loosen China’s grip on materials crucial to advanced manufacturing.
The European Commission did not immediately respond to a Reuters request for comment.
According to the FT report, these early-stage plans will be presented to a commission meeting dedicated to China on May 29 and could then be endorsed by EU leaders in late June.
(With inputs from Reuters)
