The EU is changing its procurement rules to reduce its dependence on China
The European Union is drafting new rules that will require companies to source critical components from at least three different suppliers. The aim is to reduce dependence on China and protect the economy from external pressure. The decision could significantly alter global supply chains, according to the Financial Times, citing EU officials.
The European Union is preparing sweeping changes to procurement rules for businesses that could radically affect how European companies work with suppliers around the world, as Brussels now seeks to reduce critical dependence on China and compel companies to spread risks across multiple countries.
The new rules would limit reliance on a single supplier to approximately 30–40% and require that key components be sourced from at least three different suppliers, none of which can be from the same country. The changes focus on industries most dependent on global supplies, particularly the chemical industry and industrial equipment manufacturing, where companies have long complained about both price pressure and excessive concentration of imports from China.
As the publication’s sources note, these steps are a response to Beijing’s export restrictions on critical technologies and materials, which have already caused production disruptions in Europe, including shutdowns at certain car factories due to a shortage of rare-earth magnets. According to the FT, European Commissioner for Trade Maroš Šefčovič also plans to impose protective tariffs on Chinese chemical products and industrial equipment to curb the sharp rise in imports and reduce the trade imbalance, which is estimated to reach around €1 billion daily.
The European Commission confirms that a discussion of the initiative is scheduled for May 29, although no official decisions will be made at this stage, and the final version could be presented to EU leaders as early as the end of June.
At the same time, Brussels acknowledges that the new rules will not be directed exclusively against China, since a significant portion of the world’s raw materials is already concentrated in a few countries, including the U.S., Qatar, the Democratic Republic of the Congo, and Indonesia, making the issue of supply diversification a global challenge rather than merely a political one in relations with Beijing.
As a reminder, the U.S. and China have agreed to mutually reduce tariffs
Recall that Trump arrivedin China for the first time in nearly a decade.
Donald Trump is heading to China for talks with Xi Jinping, where the two sides plan to discuss trade, energy, and Taiwan, against the backdrop of a tense global situation.
