EU to propose diversification law to reduce China reliance

The European Commission is set to propose a new law aimed at compelling EU companies to diversify their sources for critical supplies, a move designed to reduce the bloc's economic dependence on China. European Commission President Ursula von der Leyen stated that the measure is necessary because businesses have been too slow in de-risking their supply chains, citing China's past exploitation of its dominance in critical mineral processing through export restrictions.

EU leaders, meeting in Brussels, agreed to engage with major trading partners on global macroeconomic imbalances and to assess the need for new trade measures. While China was not explicitly named in the summit's conclusions, the focus was largely on its economic practices. The escalating trade deficit with China, reported to be around 1 billion euros ($1.15 billion) daily, was highlighted by European Council President Antonio Costa as unsustainable.

Diplomats within the EU noted a growing consensus among member states regarding the problematic trade imbalance with China. This situation is further complicated by diminished access to the U.S. market due to transatlantic tariffs. Belgian Prime Minister Bart De Wever also indicated that EU leaders agreed to present a united front in the event of retaliation from third countries.