The European Commission is drafting rules requiring companies in sectors such as chemicals and industrial machinery to diversify supply chains by capping single-supplier purchases at roughly 30%-40% and sourcing the rest from at least three suppliers across different countries, the Financial Times reported on May 18, citing EU officials. Separately, trade commissioner Maros Sefcovic is preparing punitive tariffs on Chinese chemicals and machinery imports.

Beijing has increasingly wielded export controls as a strategic lever, restricting materials critical to European industry such as rare earth magnets, gallium, germanium and graphite. Curbs imposed in 2025 halted parts of the EU auto sector. Brussels is also seeking to address its sizable trade deficit with China — which in 2025 has widened to 359 billion euros ($418 billion), up nearly 20% year on year — and respond to record complaints from European chemicals producers over a surge in cheap Chinese imports.