The European Union is preparing a support mechanism for companies that would allow them to avoid relying solely on China for supplies of essential goods and would also mitigate the impact of Beijing’s measures in the event of a trade conflict, Bloomberg reported Saturday, citing sources.
“According to people familiar with the matter, this working tool will not come cheap and will require funding, while EU members are haggling over the long-term budget,” the agency reported.
However, the amount of funding needed, as well as the scale of China’s retaliatory measures in the event of a conflict, remain uncertain.
The mechanism being developed by the European Commission is intended to be part of the EU’s efforts to mitigate the effects of a significant trade deficit with China, which stands at 360 billion euros and affects all EU member states.
At the same time, the EU’s strategy for restructuring trade relations with China also calls for negotiations, diversification of supply chains, and more effective use of existing measures to support domestic producers. The European Commission also emphasized that none of the protective measures are directed exclusively against China.
The parties have set October 2026 as the deadline for reaching an agreement. In October, European Commissioner for Trade Maroš Šefčovič is scheduled to travel to China ahead of the EU summit in Brussels.
Bloomberg notes that Beijing controls the supply of mineral raw materials and microchips, which are critical to key sectors of European industry, including the defense and automotive sectors.
