Key facts
- The EU is working on targeted changes to its €18 trillion single market to help companies diversify supply chains, people familiar with the plan said.
- The plan aims to reduce dependence on countries including China, though China is not explicitly named in the proposal, according to Euronews.
- The European Commission will present the tool in early December, a week before a meeting of EU leaders, Euronews reported.
- It remains unclear which sectors will be covered and what criteria will be used, according to Euronews.
- BusinessEurope's Luisa Santos said companies already do the maximum to keep costs low and warned diversification would raise costs.
The European Union is working on targeted changes to its €18 trillion ($20.1 trillion) single market to help domestic companies diversify supply chains away from countries including China, according to people familiar with the plan, in a report published November 3, 2026.
The European Commission will present a tool in early December, a week before a meeting of EU leaders, designed to push companies to diversify suppliers and reduce strategic dependencies on a single country, Euronews reported. Although China has not been explicitly mentioned, the proposal is directly aimed at Beijing, which blocked exports of rare earths in 2025, the outlet reported.
Few details of the proposal have emerged. In a consultation with EU businesses that closed on Tuesday, October 27, 2026, the Commission said the instrument would aim to address cases where a high level of strategic dependencies on a single supplier country creates a risk for the EU's security of supply and thus its economic security, according to Euronews.
Some companies warned in their consultation responses that finding alternative suppliers would increase costs. Luisa Santos, deputy director general at BusinessEurope, told Euronews: "Companies are already doing the maximum to have a cost-effective structure." She added that companies work with certain suppliers because they offer the best product in terms of cost and performance.
EU Trade Commissioner Maroš Šefčovič said in a speech on June 5, 2026 that industry would be "on the front line" of efforts to diversify suppliers and that business models should incorporate "the cost of resilience." It remains unclear which sectors will be covered and what criteria will be used, Euronews reported.