It is time for EU to take new trade defence measures against China, Maroš Šefčovič, the EU’s trade commissioner, said in Brussels on Friday.

“The situation where we are accumulating trade deficits with China at the pace of €1 billion/day is clearly unsustainable,” he said, in a reference to the EU’s €360 billion trade deficit with China.

“Diversification now requires a dedicated instrument.”

Europe was hit hard in 2025 when Beijing, which has a chokehold on 90% of global rare earth supply, imposed export restrictions styming the EU’s efforts to build up its defence industry.

“Recent industrial cases, in particular supplies of chips and rare earths, have reinforced my conviction that a step change is necessary,” Šefčovič said. “We understand the urgency for critical minerals but every high-risk sector must be weaned off single-supplier dependence.”

“Economic security is a shared responsibility… we must have their back, but industry must also do its part,” he added. Companies would have to “integrate the cost of resilience into business models and treating geopolitical rrisks as commodities and core businesses.”

Several major EU economies, including France and Spain, sent a letter last month to the European Commission urging it to strengthen its defence tools against Chinese “overcapacity”. Madrid, however, has since distanced itself from the proposal, amid threats of retaliation by Beijing.

(bw)