On Wednesday, December 3, the European Commission unveiled a new economic security plan aimed at enhancing the EU’s capacity to address threats such as rare earth supply shortages by improving existing trade measures and utilizing new defense tools. EU officials stated that if necessary, the EU may use legal means to compel industries to reduce procurement from China to protect Europe from the impact of future hostile actions.
The EU’s economic security defense includes two “documents”: the Economic Security Doctrine and the new RESourceEU action plan. The EU outlined three main goals: a shift towards more proactive foresight thinking, clear utilization of existing tools, and enhancing collaboration with partner countries.
China has implemented export restrictions at least twice this year, greatly increasing the urgency for the EU to strengthen its economic threat defenses. One of the EU’s key objectives is to address China’s export restrictions on critical minerals. Just weeks ago, China’s restrictions on rare earth exports posed risks to various European industries, from automotive and technology to defense sectors. By blocking the delivery of crucial automotive chips to Dutch chip company Nexperia, Beijing weakened a strategic link in the EU supply chain.
EU Commission Vice President and Commissioner for Industry and Trade Stephane Sejourne emphasized the threats posed by overreliance on Chinese supply chains. He stated that if industries do not take action, the EU may enforce certain supply chain diversification measures.
“We will enforce, through legal means, European companies to diversify their sources of supply. It’s not the case now and there’s no such provision in the ReSourceEU plan, but it’s a wake-up call, a strong wake-up call,” Sejourne said. “For economic security reasons, European companies – just like companies in Japan, the US, and even India – must cease 100% procurement from China.”
EU Trade Commissioner Maros Sefcovic mentioned that the EU may learn from Japan’s experience. After China temporarily suspended rare earth exports to Japan in 2010 due to territorial disputes, Japan diversified its supply, strengthened recycling, established reserves, and forged cooperative relationships with other countries to address rare earth supply issues.
“Europe remains an advocate for open trade and global investment, but openness without security measures can turn fragile,” EU Trade Commissioner Maros Sefcovic said. “To maintain resilience in the evolving geopolitical and geo-economic landscape, we must be more strategic and proactive in using existing tools while developing new ones to strengthen our economic security.”
The EU’s RESourceEU program aims to support 25 to 30 strategic projects in the sector through a funding scheme to reduce risks in the EU’s critical commodities supply chain and achieve supply chain diversification.
To enhance Europe’s recycling capacity, the EU Commission will introduce measures in early 2026 to restrict the export of permanent magnet waste and take targeted measures for aluminum waste. If necessary, the EU will also consider similar actions for copper waste. Recycling rare earth waste could meet 20% of the EU’s permanent magnet demand, equivalent to 20,000 tons annually.
The EU will also establish a new fund of €20 billion per year supported by the European Investment Bank to support industries reliant on cheap Chinese supply achieve diversification.
According to a statement released by the European Commission on Wednesday, the EU will mobilize up to €30 billion (US$35 billion) within the next 12 months to support specific projects that can provide alternative supplies in the short term.
The EU said it will accelerate the advancement of strategic projects through a series of measures that could reduce the EU’s supply chain dependency by up to 50% by 2029.
The European Commission hopes to enhance coordination with EU member states and businesses to review the EU’s supply chains, foreign investment access rules, defense and aerospace industries, and strengths in new technologies and critical infrastructure.
“We aim to shift from passive responses to actively reshaping our policies,” Sefcovic said. “We have started this process…because we have faced many challenges this year, and I don’t think this situation will stop on January 1.”
Sefcovic stated that the European Commission will study how to expedite the implementation of existing trade measures, such as anti-dumping and countervailing duties, by the third quarter of 2026. These measures currently require a year-long investigation before being used.
The EU may also introduce new measures to counter unfair trade and market distortions, including overcapacity, encourage high-risk industry companies not to rely solely on one supplier, and prioritize EU domestic companies in public tenders in strategic areas.
The EU will prioritize supporting European companies that reduce foreign dependence in critical industries or technology sectors and enhance scrutiny of foreign investments.