EU to Fast-Track China Risk-Reduction Strategy, von der Leyen Says New Trade Diversification Tool Could Debut in December

European Commission President Ursula von der Leyen said the European Union is moving to accelerate its strategy of reducing economic exposure to China, with plans to bring in a new tool designed to diversify trade ties as early as December.

Speaking on Friday, von der Leyen framed the initiative as a response to what EU leaders describe as a widening and increasingly risky imbalance in trade with China. That gap, she said, has helped Beijing secure an outsized position in supplying key manufactured goods into the European market, leaving European industries more dependent on Chinese production across multiple sectors.

The planned measure is intended to push European companies and governments to broaden sourcing and commercial relationships beyond China, part of a broader “de-risking” agenda the bloc has been developing. While the Commission has previously emphasized that de-risking is not the same as economic decoupling, the timeline von der Leyen set out underscores a sense of urgency among policymakers who argue that Europe’s industrial base and strategic autonomy are being strained by current trade patterns.

The comments come as pressure grows from major EU capitals for decisive steps to tackle the bloc’s trade position with China. German Chancellor Friedrich Merz and French President Emmanuel Macron have both called for rapid action to address the imbalance, signaling an alignment between the EU’s two largest member states and the Commission on the need for a faster pivot.

In parallel, France and Germany are also reported to be exploring adjustments to localization requirements—rules that typically require certain production or value-adding activities to take place domestically—as part of a broader effort to secure closer policy coordination with the United Kingdom on issues linked to Chinese-made vehicles. The goal, according to the report, would be to offer London some flexibility on such requirements in exchange for alignment on how to approach cars produced in China.

Von der Leyen’s proposed diversification mechanism would add to the EU’s expanding toolbox for managing trade vulnerabilities and supply-chain risks. The Commission has argued that a more diversified set of trading partners and suppliers would make Europe less susceptible to disruptions, sudden export restrictions, or price shocks tied to heavy reliance on a single country.

A December implementation target suggests the Commission intends to move quickly through the internal EU process of finalizing and adopting the measure, which typically involves consultation with member states and, depending on the legal form, scrutiny from EU institutions.

Why it matters

European manufacturers, importers, and consumers could see shifts in sourcing and market access if the EU pushes faster to spread supply chains away from China. The move may also shape how Europe and the UK coordinate policies on Chinese-made electric and conventional vehicles—an area with growing economic and political sensitivity. Next to watch is whether the diversification tool comes with incentives, restrictions, or reporting requirements, and how China responds as the EU tightens its de-risking posture.