In early December, the European Commission will introduce a tool that is intended to encourage companies to diversify their suppliers and reduce strategic dependencies on a single country. The Commission will announce this one week before a meeting of EU leaders.
The future proposal is directly directed at Beijing, which blocked exports of rare earths, which are essential for green technologies, digital industries, and defence, in 2025, despite the fact that China has not been expressly mentioned. This action was taken in the context of a trade war with the United States.
Beijing’s decision to restrict access to strategic chips during a dispute with the Dutch government regarding Nexperia also endangered the EU car industry that year. Diversification has become increasingly necessary in sectors where economic vulnerabilities are exacerbated by dependencies, despite Brussels’ ongoing negotiations with Beijing to rebalance their trade relationship. In their responses to the consultation, certain companies cautioned that the cost of locating alternative suppliers would rise.
Luisa Santos, Deputy Director General at BusinessEurope, told Euronews that companies are already working to establish a cost-effective structure. “If they are collaborating with specific suppliers, it is because they provide the most competitive pricing and performance options for the product.
Nevertheless, in a speech on June 5, 2026, EU Trade Commissioner emphasised that industry would be on the front line of efforts to diversify suppliers and that business models should factor in “the cost of resilience.
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