EU strengthens its tools against dependence on critical supplies

EU strengthens its tools against dependence on critical supplies

The European Union (EU) is preparing a new instrument to reduce its dependence on single suppliers in strategic sectors. This initiative, led by Trade Commissioner Maroš Šefčovič, is inspired by the Energy Union model. Launched after Russia's annexation of Crimea in 2014, the latter had helped reduce dependence on Russian hydrocarbons.

Šefčovič emphasized the need to have at least three sources of supply for critical materials. Semiconductors and rare earths are among the priorities. This approach aims to avoid political or industrial disruptions. European leaders are to discuss this during the summit on June 18 and 19, 2026, according to Politico Europe.

A response to trade tensions with China

Trade relations between the EU and China have been tense for several months. Chinese industrial surpluses and state subsidies have fueled European fears for several months. Beijing rejects these accusations of unfair practices. The Chinese Ministry of Commerce called a recent report by the Organization for Economic Cooperation and Development (OECD) biased.

This report stated that Chinese companies benefited from much higher subsidies than their international competitors. China disputes this methodology, citing the absence of a unified multilateral framework. Negotiations between Šefčovič and his Chinese counterpart Li Chenggang, scheduled for late June, should address these differences.

The United States increases pressure

Washington has recently raised its tariffs on Chinese imports, particularly in electric vehicles and batteries. These measures add to those already in place since 2018. The EU, although more cautious, is considering targeted tariffs. The European Commission described the current situation as "unsustainable" in a statement on May 29, 2026.

Beijing has threatened retaliation in case of further restrictions. Chinese exports to Europe surged by 25% in 2024, according to European customs. The steel and electric vehicle sectors are particularly affected. Some member states, such as France and Italy, are pushing for a firm response.

An internal debate on the strategy to adopt

The Twenty-Seven remain divided on the approach to favor. Germany, China's largest trading partner in Europe, advocates moderation. Berlin fears retaliatory measures that would affect its automotive industry. German manufacturers make nearly 40% of their sales in China.

In contrast, Poland and the Baltic states support a harder line. They highlight the geopolitical risks linked to excessive dependence. The Lisbon Treaty, which came into force in 2009, allows the EU to adopt safeguard measures in case of a threat to its market. Article 207 of the treaty on the functioning of the EU also frames trade policies.

International agreements as a negotiation framework

The EU relies on the rules of the World Trade Organization (WTO) to justify its actions. China's WTO accession protocol in 2001 provided protection mechanisms against unfair subsidies. However, Beijing disputes the application of these clauses, deeming them obsolete.

The EU-Japan Economic Partnership Agreement, which came into force in 2019, could serve as a model. This treaty includes provisions on industrial subsidies and technology transfers. A similar mechanism with China seems unlikely in the short term. However, ongoing negotiations at the OECD could offer common ground.

European companies on the front line

European industrialists express divergent opinions. The renewable energy sector, dependent on Chinese solar panels, fears a rise in costs. European battery manufacturers, such as Northvolt, see an opportunity to reduce their dependence.

Small and medium-sized enterprises (SMEs) fear targeted retaliation. In 2025, 12% of European exports to China came from SMEs. These companies do not have the means to quickly diversify their supplies. The European Commission is considering aid to support this transition.

Rare earths at the heart of the issues

China controls 60% of the world's production of rare earths, essential for green and military technologies. The EU launched the Critical Raw Materials Act in 2023 to secure its supplies. This regulation sets diversification targets by 2030.

Mining projects in Sweden and Greenland could reduce this dependence. However, the lead times for production often exceed five years. Current tensions could accelerate these investments. Australia and Canada, EU allies, are among the alternatives considered.

The risks of a trade escalation

A full-scale trade war would penalize both parties. China accounts for 16% of European exports, according to Eurostat. The luxury, aeronautics, and machine tools sectors would be particularly exposed.

Beijing has retaliatory levers, such as restrictions on gallium and germanium exports. These metals are crucial for semiconductors. In 2026, China had already imposed controls on these resources. A new escalation could disrupt global supply chains.

Diplomatic and Economic Alternatives

The EU is exploring partnerships with other regions to reduce its dependence. The free trade agreement with Mercosur, under negotiation since 1999, could be finalized in 2025. This South American bloc has significant reserves of lithium and copper.

Africa, rich in critical minerals, is also attracting attention. In 2022, the EU launched the Global Gateway, a 300 billion euro investment plan. This program aims to develop infrastructure in Africa and Asia. Critics, however, highlight the risk of reproducing colonial dependence patterns.

Implications for European Consumers

Diversification measures could lead to price increases for consumers. Electric vehicles and smartphones, dependent on rare earths, would be affected. European subsidies could mitigate this impact.

Supporters of these policies argue that economic security takes precedence over short-term costs. The Covid-19 pandemic and the war in Ukraine have shown the risks of excessive dependencies. Energy prices had then reached record highs in 2022.

Conclusion: Towards a Precarious Balance

The EU finds itself at a strategic crossroads. Diversifying supplies meets a geopolitical necessity. However, the risks of escalation with China and internal divisions complicate the task. The coming months will be decisive in defining a coherent approach.

Negotiations at the OECD and the EU-China summit in June 2026 could offer avenues. A purely protectionist solution seems unlikely. Partnerships with other regions and investments in alternative technologies appear as promising paths.

The stakes go beyond the commercial framework. It is about preserving Europe's strategic autonomy in a context of increased geopolitical rivalries. The decisions made in 2025 will have lasting repercussions on the global economy.

Key Points

• The EU is preparing a new instrument to reduce its dependence on single suppliers.
• Semiconductors and rare earths are among the priorities.
• Trade relations between the EU and China have been tense for several months.
• The United States is increasing pressure with tariffs on Chinese imports.
• The Twenty-Seven remain divided on the approach to favor towards China.

Sources

1. Politico Europe - "EU trade chief calls for new tool to diversify supply away from China". (secondary)
2. Asia Times - "Sino-West trade strains deepen on new tariffs and rules". (secondary)
3. SCMP World - "EU trade chief swipes at China’s overcapacity, but seeks ‘meaningful’ talks with Beijing". (secondary)
4. SCMP World - "China rejects OECD report on industrial subsidies as ‘one-sided’ amid EU trade tensions". (secondary)
5. SCMP World - "EU, China hold talks as trade war looms". (secondary)
6. SCMP World - "EU needs a ‘dedicated instrument’ to unwind China dependencies, trade chief says". (secondary)
7. Asia Times - "Beijing vows to retaliate as EU warns of China Shock 2.0". (secondary)
8. BFM Business - "EDITORIAL. Fear of Chinese reprisals, fear of tensions with the United States... Faced with the influx of foreign products, Europe is this time ready to act much more quickly (but will it?)". (secondary)
9. Atlantic Council - "Europe has had enough of China’s export surge". (secondary)
10. WAtoday Perth - "There’s a new front in the global trade war, and Trump’s not part of it". (secondary)

Transparency: 10 sources (0 primary, 10 secondary). Verification: June 9, 2026.

Truthyx - June 9, 2026