The European Union is intensifying efforts to limit its economic dependence on China by developing new trade instruments aimed at diversifying supply chains. Officials highlighted growing concerns over trade imbalances and recent disruptions in critical materials and components sourced predominantly from China.
Maros Sefcovic, the EU’s trade commissioner, flagged the bloc’s escalating trade deficit with China, which reaches about 1 billion euros daily as unsustainable. He emphasized the urgent need for dedicated mechanisms to tackle vulnerabilities exposed by China’s control over rare earth elements—accounting for roughly 90 percent of global refining—and semiconductor components crucial to various industries.
Tensions have escalated following China’s export curbs on Dutch semiconductor maker Nexperia, whose chips, largely assembled in China, play a vital role in automotive manufacturing. These recent supply challenges have prompted EU leadership to seek a strategic shift away from dependence on single suppliers in high-risk sectors. According to Sefcovic, broad diversification and integrating the costs of resilience into business models are essential to managing geopolitical risks as part of standard commercial planning.
Calls for strengthened trade defense instruments against Chinese overcapacity have gained momentum from member states including France and Spain. However, Spain later retracted full support amid fears of retaliatory actions by Beijing. Meanwhile, Denis Redonnet, the European Commission’s chief trade enforcement officer, signaled the imminent introduction of new tools designed to counteract China’s intense economic distortions on global markets.