EU Announces Plan to Cut Strategic Dependence on China

The European Commission reported that the EU’s trade deficit with China reached €359.9 billion last year, with Chinese imports equal to €559.4 billion, or 22.3 % of total EU imports. The bloc relies on China for 100 % of heavy rare earth elements, 98 % of solar panels, 54.4 % of machinery and vehicles, and 9.8 % of chemicals, creating a strategic vulnerability for the green transition and economic security.

On 29 May the Commission announced a policy shift toward “de‑risking” rather than full decoupling, targeting the automotive, clean‑technology and machinery sectors. Measures include expanding EU production capacity, building strategic stockpiles and diversifying supply chains for critical raw materials. Existing legislation such as the Critical Raw Materials Act, the EU Chips Act, the Industrial Accelerator Act and the Net‑Zero Industry Act will be leveraged to address choke points where Chinese suppliers hold dominant market positions.

The plan acknowledges higher costs and a slower scaling period as Europe works to replace Chinese capacity, but aims to increase resilience and reduce exposure to supply disruptions.