The European Union’s Trade Commissioner and Chief Trade Negotiator, Maros Sefcovic, stated on Friday (June 5) that the EU is considering introducing new regulations requiring key industry enterprises to reduce reliance on a single supplier, particularly aiming to lessen dependence on Chinese supply chains to strengthen European economic security and supply chain resilience.
According to Reuters, Sefcovic mentioned during a forum at the European Policy Centre in Brussels, Belgium, that the European Commission is evaluating a legislative proposal that may mandate companies to establish at least three different sources for their supplies in the future.
“There is a need for specific policy tools to promote diversification,” he said. Sefcovic also mentioned that if companies source more than 40% of critical materials from a single supplier, adjustments to the supply chain may be necessary.
Earlier in mid-May, EU officials had indicated the EU’s intention to develop this new regulation, with an EU spokesperson confirming discussions scheduled for May 29.
EU Vice President and Commissioner for Industry Strategy Stephane Sejourne stated to Politico on May 29 that the day’s debate should solidify Europe’s growing consensus on the necessity of acting on “China Impact 2.0.”
Sefcovic highlighted the EU’s excessive dependence on Chinese supply chains in critical mineral resources, semiconductors, and certain industrial raw materials, posing economic security risks.
He emphasized that the EU will focus on “high-risk industries,” such as critical minerals, advanced manufacturing, industrial machinery, and chemicals, to mitigate disruptions in the supply chain and geopolitical risks.
Under current EU policies, companies have been encouraged to diversify procurement when reliance on a single source becomes too high. Sefcovic mentioned ongoing discussions within the EU on potentially strengthening such requirements and providing clearer legal constraints.
He stated that coordination with the business sector will be key in implementing these measures, including establishing transitional periods to alleviate the cost pressures of adjusting supply chains.
In recent years, the EU has continuously criticized China for its insufficient market access and substantial subsidies for domestic products entering the European market, exacerbating trade imbalances between Europe and China.
Currently, the EU’s trade deficit with China stands at around €360 billion. Meanwhile, Beijing maintains dominance in vital supply areas such as rare earths, semiconductor materials, and critical industrial components.
The EU is concerned that in the face of deteriorating geopolitical situations, China may exert pressure on European industry chains by imposing export restrictions.
Sefcovic mentioned that EU leaders will convene a summit in Brussels on June 18-19 to discuss economic security issues and provide political guidance on trade and supply chain tools for the next phase of the European Commission.
According to insiders, the EU aims to enhance its negotiating leverage with China by promoting supply chain diversification. Negotiations between the two sides in recent years have focused on market access, industrial subsidies, and overcapacity issues with limited progress.
However, China has previously warned of potential countermeasures if the EU proceeds with restrictive measures.
Earlier this week, Sefcovic held talks with Chinese Vice Minister of Commerce Li Chenggang and invited Chinese Minister of Commerce Wang Wentao to visit Brussels in the coming weeks to further discuss trade and supply chain issues.
The European Commission responsible for EU trade affairs convened a closed-door meeting of senior officials on May 29 to discuss the next steps regarding the EU’s policy toward China. Following the meeting, the European Commission issued a statement emphasizing the necessity for continued contacts and dialogue between the two sides while asserting that the current trade and investment relationship is unsustainable, with a commitment to taking “stronger, forceful, and coherent response measures.”
These developments signal a shift in the EU’s approach to trade relations with China, demonstrating efforts to address economic security concerns and reshape supply chain dynamics to reduce dependency on Chinese sources.