EU Plans to Reduce Dependence on China and U.S. via Trade Reforms and Strategic Sectors

EU leaders are scheduled to discuss measures to reduce economic reliance on the United States and China, aiming to lessen vulnerability to economic coercion. Key initiatives include removing bureaucratic trade barriers equivalent to internal tariffs of 44% on manufactured goods and 110% on services; enabling European firms to scale and compete globally; and establishing a preference for European goods in public procurement. The plan also targets strategic industries—clean-tech, defence, semiconductors, critical raw materials, digital technologies, AI, energy, biotech, and automotive—while diversifying supply chains and rebuilding the EU’s defence industry. Trade diversification is advancing with concluded negotiations with Mexico, Mercosur, Indonesia, Switzerland, and India, and pending deals with Australia, Thailand, the Philippines, and the United Arab Emirates. The EU will also explore a digital euro and an integrated capital market.