EU trade chief calls for new instrument to reduce reliance on single-source suppliers

The Energy Union as a template

The EU is considering a specific rule to compel companies to diversify their suppliers, Šefčovič said, suggesting that voluntary measures alone may not be sufficient. He described recent industrial cases as a turning point: "Recent industrial cases, in particular supplies of chips and rare earths, have reinforced my conviction that a step change is necessary. We understand the urgency for critical minerals, but every high-risk sector must be weaned off single-supplier dependence."

Beijing has used export controls that put pressure on EU industry, a backdrop that has sharpened concerns inside the bloc about the cost of concentrated supply chains. Šefčovič's remarks suggested the commission is now ready to translate those concerns into a concrete policy proposal.

On timing, Šefčovič said he would bring his recommendations to the European Council meeting of EU national leaders on June 18 and 19. "What you can expect from us is that we kind of mapped out the situation, and I would say the assessment of the overall relationship with China will be presented to the 27 heads of state and government," he said.

Timeline and political process

He added that he expects political guidance from EU leaders on which concrete tools to focus on once the assessment is delivered. "I believe that after that we will get political guidance on what concrete tools we should focus on," Šefčovič told the forum.

The reference to the Energy Union was deliberate. That initiative, launched after Russia's annexation of Crimea in 2014 and previously led by Šefčovič himself, was designed to reduce the bloc's dependence on a single external supplier of energy. The trade chief is now proposing a comparable architecture for industrial inputs.

The proposed diversification instrument would target sensitive sectors including chips and rare earths, two areas in which China plays a dominant role in global supply chains. The EU has long warned that over-reliance on a single supplier leaves the bloc vulnerable to political and economic pressure.

What the instrument could target

Officials have not yet published details of how a new instrument would be funded or structured, and Šefčovič indicated that the commission is waiting for direction from member states before refining the proposal. The June European Council meeting is therefore likely to set the political parameters for the next phase of work.

Šefčovič's speech signals a shift in the EU's posture on China from rhetorical concern to operational planning. By invoking the Energy Union as a template, the trade chief has framed diversification as a long-term industrial project rather than a short-term trade response.