EU plans rules requiring companies to use three suppliers to reduce China reliance

The European Union is preparing new rules that would require companies in the bloc to buy critical components from at least three different suppliers, part of a broader effort to cut dependence on China, according to a report in the Financial Times cited by Reuters and summarized by Asharq Al-Awsat. The plan would mainly affect businesses in sectors seen as strategically important, including chemicals and industrial machinery.

Under the draft approach, companies would be limited to sourcing only about 30% to 40% of components from a single supplier, with the rest coming from at least three suppliers from different countries. The goal is to make supply chains more resilient and reduce the risk of companies being exposed to disruptions or political pressure if one country dominates the market for a key part or material. The move reflects a wider shift in EU policy toward what officials call “de-risking” rather than total economic separation from China.

The reported measures come as Brussels looks for ways to protect industries that rely heavily on imported inputs. European Trade Commissioner Maros Sefcovic is also said to be considering punitive tariffs on Chinese chemicals and machinery, in part to address the EU’s large trade deficit with China and what the bloc sees as China’s growing use of trade as leverage. That trade deficit was described by the Financial Times as around 1 billion euros a day.

The Commission has not publicly confirmed the details of the proposal. A Commission spokesperson said an orientation debate on EU-China relations is scheduled for May 29, but declined to discuss internal deliberations, noting that such meetings do not amount to formal legislation. According to the report, the ideas could later be presented to EU leaders in late June if they advance.

The proposed rules would build on a broader European push to diversify supply chains in strategic sectors, a trend also reflected in EU policies on critical raw materials and industrial resilience. For European companies, the changes could mean adjusting long-standing sourcing arrangements and potentially paying more for supplies in the short term. For policymakers, the aim is to reduce vulnerability in industries that are central to Europe’s economy and manufacturing base.