The European Commission is developing a “solidarity instrument” to help companies reduce their reliance on China for essential supplies and to cushion the impact of any Chinese retaliation, Bloomberg reported on Saturday.
The proposal follows a June summit at which EU leaders discussed the bloc’s trade relationship with China. They agreed on the need to diversify supply chains and to strengthen internal solidarity in case tensions escalate into a broader trade conflict.
According to Bloomberg, citing people familiar with the matter, the Commission is now working on the details and this week briefed member state representatives on its plans. A Commission spokesperson declined to comment.
The scheme is expected to carry a significant cost. This comes as EU member states are negotiating the next long-term budget for 2028 to 2034.
It remains unclear how much funding would be set aside. The final amount would depend in part on the scale of any Chinese countermeasures, although the size of the EU-China trade relationship suggests the sum could be substantial.
EU officials say the bloc’s trade deficit with China has now reached €1 billion a day and has become unsustainable. In the talks, China has so far appeared willing to open its market further to European goods, the sources said, but has shown far less readiness to curb its exports to the EU.
