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The EU is setting up an emergency task force to deal with crises including a possible trade conflict with China, as a truce over export controls on crucial rare earths nears expiry.
The group of European Commission officials from leading departments will aim to predict and respond to future emergencies as the world grows more chaotic, according to three officials.
The bloc is braced for a possible trade war with China in October, when Beijing could reimpose restrictions on rare earth exports vital to the manufacturing industry. China accounts for 66 per cent of all mined supply and 88 per cent of global refined supply of rare earths.
“This is about being more agile, and preparing to deal with things we identify as a problem,” one senior official said.
The task force will seek out alternative sources and possibly deploy EU funding to ensure supplies are maintained, another official said.
Trade commissioner Maroš Šefčovič has warned Beijing that unless there was progress in reversing the increase in the €1bn a day trade deficit then Brussels would take action.
The EU is reliant on Chinese suppliers for chips used, including in car manufacturing. A squeeze on semiconductor supplies in October — after a dispute between the Dutch government and the Chinese owner of major producer Nexperia — forced the bloc to temporarily loosen sanctions on another Chinese supplier, after the car industry warned that it would run short.
One of the officials said China was only part of the focus of the new group, which should first meet in September.
The task force will have staff from departments responsible for industry, trade, financial services, development aid, the economy and the central unit directly under the control of Commission president Ursula von der Leyen.
Von der Leyen pledged to run a “geopolitical commission” but it has found itself reacting to events rather than shaping them.
In the last year, the EU has confronted US President Donald Trump’s tariffs, the Iran war choking off energy supplies, a fertiliser shortage that could reduce food production and growing hybrid attacks from Russia.
Chinese President Xi Jinping agreed to lift a ban on some rare earth magnet and raw material exports for a year last October after meeting Trump, but that agreement is set to expire later this year. It also imposed a licensing system that required European customers to submit requests and provide details of production methods and their customers.
While officials are hopeful that the truce will be renewed in October, they say they have to prepare for the worst.
The Commission is also expected to issue a “proposal on addressing supply chain dependencies” in September. This should include an export tax on aluminium scrap to keep more of it in the bloc to be recycled into fresh metal, and action to increase the recycling of rare earth magnets within the EU, according to people briefed on the plans.
It is also working on a diversification law that would oblige companies to reduce exposure to a single supplier of certain key inputs.
EU trade spokesperson Olof Gill said: “As part of its ongoing intensification of structured dialogue with China, the Commission is ramping up the frequency of regular co-ordination and internal work across services.”
