European industry is stockpiling critical raw materials, especially rare earths, amid looming EU-China trade talks and potential Chinese export restrictions.

The EU is preparing new rules to encourage or mandate diversified sourcing away from China, with a proposal due in early December, while policymakers stress that meaningful dependency reduction will take years.

EU plans include a 2030 goal to source 10% of strategic raw materials domestically and to process 40% within Europe, along with 60 designated strategic projects to speed permitting and financing for critical minerals.

EU Trade Commissioner plans a Beijing visit on 8–9 October to push for a breakthrough to shrink Europe’s record trade deficit with China, with threats to restrict Chinese imports if no agreement is reached.

China extended a moratorium on additional rare earth export controls until January, after earlier 2023 restrictions disrupted European manufacturing including carmakers.

European initiatives include Solvay and Performance Materials advancing rare earth magnets production and BMW-led German efforts to create a critical minerals trading hub for joint purchasing.

Beijing has previously restricted seven rare earth elements and related processing technologies, prompting Europe to diversify supply sources and stockpile more.

The EU aims to narrow its daily trade deficit with China and press Beijing to import more EU goods or curb exports, as part of reducing dependence on China for critical materials.

German industry officials warn that tighter export controls would hit the sector hard, with some companies already stockpiling several months of supplies as a precaution.