Key Facts
• On December 3, 2025, the EU announced economic security guidelines.
• The plan aims to reduce reliance on China, especially for rare earth elements.
• China imposed rare earth export restrictions twice in 2025.
• 98% of rare earths used in the EU in 2021 were imported from China.
• €3 billion (approx. $5.4 billion) will be invested in mining and recycling projects.
• A new center is proposed to monitor demand and coordinate joint procurement.
• The EU plans to diversify suppliers to counter China’s trade practices.
• The ‘Nexperia issue’ highlighted risks of semiconductor technology leaks to China.
• Japan’s JOGMEC is cited as a model for economic security strategies.
• Rare earths are critical for defense systems and digital technologies.
Summary
The European Union (EU) has unveiled new economic security guidelines to accelerate its ‘de-risking’ strategy from China. This move comes in response to China’s rare earth export restrictions and the ‘Nexperia issue,’ which exposed vulnerabilities in the EU’s semiconductor supply chain. Rare earths, essential for defense and digital technologies, remain a critical dependency, with 98% of the EU’s supply in 2021 sourced from China. To address this, the EU will invest €3 billion in mining and recycling projects and establish a center to monitor demand and coordinate procurement. The EU also aims to diversify suppliers and tighten investment screening to mitigate risks. Japan’s JOGMEC is being used as a model for these efforts. These measures reflect the EU’s urgent need to secure critical minerals and reduce reliance on China’s trade practices.
