The EU wants to reduce its dependence on China by diversifying its supply chains

The European Commission is considering new legislation that could require companies operating in strategic sectors to diversify their sources of supply in order to reduce their dependence on a single supplier, particularly when it comes to China.

According to the European Commissioner for Trade, Maroš Šefčovič, Brussels is considering requiring the companies concerned to have at least three separate sources of supply for certain products deemed sensitive.

This initiative is part of a broader review of the European Union's trade defense instruments, the conclusions of which are expected in the third quarter of the year. The objective is to strengthen the bloc's economic resilience to international disruptions and geopolitical tensions.

The Commission also wants to accelerate anti-dumping and anti-subsidy investigations in order to react more quickly to trade practices deemed unfair. New measures could also be proposed to address the problems of industrial overcapacity affecting certain global markets.

For several years, the European Union has sought to limit its vulnerability in strategic areas such as critical raw materials, semiconductors, batteries, pharmaceuticals, and advanced technologies. The COVID-19 pandemic and subsequent geopolitical tensions have highlighted the risks associated with excessive dependence on a limited number of foreign suppliers.

If adopted, this legislation would mark a new step in the European strategy to secure its supply chains while preserving its economic competitiveness. However, the companies concerned could face additional costs related to diversifying their suppliers and reorganizing their logistics networks.

Discussions are continuing within the European institutions and no final decision has yet been made regarding the exact form that this future regulation would take.