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🇸🇬 Singapore /Economy & Trade

EU considers rules to cut reliance on China via supply chain diversification

From The Straits Times · () English

Translated from English, summarized and contextualized by DistantNews.

At a glance

News Named sources Context piece
  • The European Commission is considering new legislation to reduce reliance on single suppliers, particularly from China, in sensitive sectors.
  • The proposal would require companies to diversify their supply chains to at least three sources.
  • This initiative is part of a broader review of EU trade defenses aimed at enhancing economic security and addressing overcapacity.

The European Commission is exploring new rules to compel companies in critical sectors to diversify their supply chains, aiming to lessen dependence on single suppliers, especially those based in China. European Trade Commissioner Maros Sefcovic announced that the proposal would be part of an upcoming review of EU trade defenses, due by the third quarter.

This review will also include measures to expedite anti-dumping and anti-subsidy cases, alongside potential actions to combat overcapacity in certain industries. Sefcovic emphasized the need for a "dedicated instrument" for diversification, highlighting the urgency for critical minerals and the necessity for all high-risk sectors to move away from single-supplier reliance.

Diversification now requires a dedicated instrument.

— Maros SefcovicSpeaking at a conference on the need for new EU trade measures.

By securing at least three different sources for essential supplies, companies could better withstand supply chain disruptions and geopolitical risks, such as export restrictions imposed by China on rare earths. While specific high-risk sectors or suppliers were not identified, Sefcovic indicated that EU leaders will discuss economic security and the Commission's focus areas at an upcoming summit. The proposal aims to build resilience against external pressures and ensure a more stable supply of critical goods for European industries.

We understand the urgency for critical minerals, but every high-risk sector must be weaned off single supplier dependence.

— Maros SefcovicExplaining the rationale behind the proposed diversification rules.
DistantNews Editorial

Originally published by The Straits Times in English. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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