The European Union is developing new regulations that will require companies to source critical components from at least three different suppliers to reduce dependence on Chinese manufacturers and enhance economic security.
This is reported by Finway
Limits on single supplier share and new requirements
According to preliminary drafts, the new legislation is set to establish a limit of 30-40% on procurement volumes from a single supplier. The remaining necessary components must be sourced by European companies from at least three different companies, with these suppliers not allowed to be from the same country. The most significant changes will affect key sectors, including the chemical industry and industrial equipment manufacturing, which are currently under pressure due to an influx of cheap goods from China.
“According to sources, European Commissioner for Trade and Economic Security Maroš Šefčovič intends to address the EU’s trade deficit, which amounts to 1 billion euros per day, and protect companies from ‘using trade as a weapon’ by China. In 2025, some European car manufacturers were forced to halt production lines after Beijing imposed restrictions on the export of rare earth magnets and other components.”
Tariffs and implementation prospects
EU officials have stated that, in addition to diversifying supplies, the introduction of additional tariffs on chemical products and equipment from China is being considered. These measures aim to curb the growth of imports and protect European manufacturers from unfair competition. At the same time, EU representatives emphasize that the new rules will not only apply to Chinese suppliers, as certain materials or components, such as helium or cobalt, come from various countries, including the USA, Qatar, the Democratic Republic of the Congo, and Indonesia.
Plans for changes are at an early stage of consideration and are to be presented at a European Commission meeting on May 29. If the members of the EC support the initiative, a final decision may be made by the leaders of EU countries at a summit at the end of June. It is noted that the discussion on May 29 will take place without the adoption of official proposals.
Previously, Chinese authorities have already criticized such intentions of the EU and threatened countermeasures if such restrictions are implemented.