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EU Industry Commissioner Stéphane Séjourné called for EU businesses to diversify their suppliers on Friday as trade tensions with China ramp up.
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The comments come as Beijing has made repeated threats towards the EU in recent weeks, while Brussels seeks to strengthen its legislation against its Asian rival.
Last year, China restricted exports of rare earths and chips, strategic for the EU’s green technologies, defence and automotive industries.
“Do not make 100% of your supplies in one country,” Séjourné told EU businesses after a meeting with the EU’s 27 trade ministers in Brussels. He added: “The global geopolitical situation shows that your ability to provide yourself abroad must also depend on other types of countries and also on European production.”
The European Commission has so far issued guidance to EU companies and Séjourné signalled that if they did not move, the EU executive would “perhaps have to move to the next step.”
Measures force car producers to diversify
Internally, the Commission is already working on a proposal to force car producers to source chips from multiple suppliers, Euronews has revealed.
Last year, a spat between the Dutch government and the Chinese chip company Nexperia, based in the Netherlands, caused shortages of chips for EU industries after Beijing blocked exports in retaliation.
EU Trade Chief Maroš Šefčovič told Euronews at the time that China was “weaponising” critical supplies for EU industry.
Brussels and Beijing have been at loggerheads since the EU presented several proposals restricting China’s access to the EU single market.
The so-called “Industrial Accelerator Act” aims to favour EU companies in public procurement and impose strict conditions on Chinese investments in the bloc. Meanwhile, a Cybersecurity Act could exclude Chinese telecoms companies from the EU market.
Beijing has directly threatened the EU with retaliation if it moves forward with those proposals. China repeated the threats after media reports about potential EU measures against cheap Chinese imports flooding the EU market.
An orientation debate is set to take place in Brussels between EU commissioners on 29 May to decide on the EU’s strategy as its trade deficit with China becomes more critical month after month.
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