EU to force companies to buy components from non-Chinese suppliers: Report

The ​European Union is drawing ​up plans to force companies in the bloc to ​buy critical components from at least three different suppliers in an attempt to reduce reliance on China, the Financial Times reported on Monday.

The new rules would affect ‌businesses in ⁠a handful ⁠of key sectors like chemicals and industrial machinery, the report added, citing two EU ​officials familiar with the matter.

Under the new legislation companies would be limited to buying ​about 30% to 40% of components from a single supplier and would have to source the rest from at least three different suppliers ​not coming from the same country, the ⁠FT said.


This ‌comes as China continues to use its ​chokehold on ​the processing of many minerals as leverage, at times ⁠curbing exports, suppressing prices and undercutting other countries' ability to diversify ​their sources of the materials used to make semiconductors, ​electric vehicles and advanced weapons.

European Union Trade Commissioner Maros Sefcovic is planning a series of punitive tariffs on Chinese chemicals and machinery in a bid to tackle the bloc's 1 billion euro ($1.16 billion) a day trade deficit and insulate companies from China's "weaponisation of trade," ‌the newspaper said.

Last month, Sefcovic signed a memorandum of understanding with U.S. Secretary of State Marco Rubio for ​a partnership ​on producing and securing ⁠critical minerals, as part of a push to loosen China's grip on materials crucial to advanced manufacturing.

The European Commission did not immediately respond to ​a Reuters request for comment.

According to the FT report, these early-stage plans will be presented to a commission meeting dedicated to China on May 29 and could then be endorsed by EU leaders in late June.