The European Commission discusses a policy shift to protect industries from China

European Commissioners met on Friday to discuss ways to shield Europe's industry from surging Chinese imports and to secure alternative supplies of critical inputs and minerals to reduce its heavy dependency on China.

The European Union executive wants to present ideas before the EU leaders' summit, which will take place on June 18-19. Possible measures include forcing EU companies into diversifying supply chains or creating new trade tools in order to limit China's access to chemicals, metals, and clean technology.

Western powers are trying to reverse some of the offshoring that occurred in China in the early 2000s. This has led to a loss of industrial know-how in the West and hubs in the U.S.

Focus on Trade Imbalances, Overcapacity

At a summit in mid-June, the Group of Seven Nations (G7) will address trade imbalances and excess capacity, as China continues to flex its muscles on rare earths and metals that are vital for sectors such as defence, technology, energy, and automotive industries.

Donald Trump, President of the United States, has pushed "America First". In the beginning of this year, RESourceEU, a new policy to "Buy European", was proposed by the EU to speed up the development and implementation in the EU, and to form partnerships with mineral-rich nations from Central Asia, Australia, and Brazil.

China's Foreign Ministry accused the EU of selectively using trade data to justify claims of unfairness. It has also repeatedly threatened "strong measures" if the EU adopted a "Buy European "policy and revised tech sovereignty. China denies that its trade practices are unfair.

Europe's industrial sector faces a more difficult climate than its American counterparts, as it is faced with structurally higher energy prices and stricter regulations.

Stephane Sejourne, the Industry Commissioner at the European Union, said this week that he wanted to use existing trade tools like?import duty and quotas "more systematically", across all sectors instead of targeting specific companies or material.

EU efforts to curb Chinese imports have mixed results. The EU imposed tariffs only on heavily subsided Chinese electric vehicles, but not hybrids. Nearly 40% of all new cars registered in Europe this year were hybrids, and China continues to grow its market share. (Reporting and editing by Helen Popper; Julia Payne)

(source: Reuters)