EU Proposes 'Made in Europe' Rules: 70% Domestic Supply Mandate Threatens UK Trade

EU industrial and trade leaders are advancing a "Made in Europe" policy under the Industrial Accelerator Act, proposing that in key strategic sectors European firms supply at least 70% of a product’s or project’s inputs, with foreign investment capped at 49%. The Safe Fund defense program already limits non-European inputs to 35% in its €150 billion lending. The legislation, backed by over 1,000 corporate signatories and gaining traction from France, Germany, and others, aims to bolster economic and digital sovereignty amid perceived competition from China and protectionism. Grassroots "buy European" campaigns highlight alternatives to American and British goods and services. For the UK, the rules risk billions in trade, especially in automotive and other closely integrated supply chains. UK ministers warn the absence of a supply chain agreement in the UK-EU deal mirrors the Korean FTA approach. With Brexit-related resentments lingering and Ireland set to take the EU presidency in H1 2026, the race is on to negotiate a carve-out for the UK ahead of a potential May summit.