The European Union is preparing legislation to require companies in sectors such as chemicals, industrial machinery, energy equipment, electronics, and automotive to source critical components from at least three different suppliers outside a single country by May 29, 2026 [1, 2, 3]. Under the draft rules, companies would be limited to buying about 30% to 40% of their components from a single supplier, with the remaining purchases split among at least two other suppliers from different countries [1, 4].
The plans come as a response to China’s export restrictions on key technologies and minerals, which EU officials describe as a "weaponisation of trade" harming European manufacturers [1, 5]. China dominates processing minerals critical for semiconductors, electric vehicles, and advanced weaponry, giving it strategic leverage over EU supply chains [1, 6].
"We are gradually becoming dependent on China exports in many areas. Dependence has a cost, so we must redouble efforts to diversify," said an unnamed EU Commission senior official [4]. A similar official noted the gradual increase of reliance on China and the need for "source diversification" to mitigate risks [5].
European Union Trade Commissioner Maros Sefcovic is also planning punitive tariffs on Chinese chemicals and machinery to combat the EU's roughly €1 billion per day trade deficit with China and to protect domestic companies [1, 7]. Last month, Sefcovic signed a memorandum of understanding with US Secretary of State Marco Rubio on cooperation to produce and secure critical minerals, aiming to strengthen supply chain resilience [1, 6].
The EU intends to present these early-stage diversification proposals at a European Commission meeting dedicated to China on May 29, with possible endorsement by EU leaders at the June summit [1, 8, 9]. The rules target a handful of key sectors where supply chain risks are highest, signaling a shift from prioritizing pure efficiency toward security and "de-risking" [9].
These measures reflect growing concerns within the EU about overreliance on Chinese suppliers and seek to enforce sourcing from multiple countries to reduce vulnerability to geopolitical tensions and export restrictions.
