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Brussels is contemplating the introduction of “made in Europe” targets of up to 70% for certain products like cars, in a move to promote domestic goods and reduce dependence on China.
This policy could lead to EU companies spending over €10 billion annually on more expensive European components, as outlined in a draft law set to be unveiled on December 10 by the bloc’s French commissioner Stéphane Séjourné.
The proposed legislation aims to strike a balance between protecting European industries and maintaining openness, similar to China’s industrial policies “Made in China 2025” and “China Standards 2035.”
Germany and other countries are now more open to buy-European rules due to the economic situation, particularly in industries like automotive and clean technologies.
Local content thresholds of up to 70% are being discussed, with incentives for vehicles and batteries meeting the benchmarks.
The Industrial Accelerator Act, if passed, would set guidelines for the use of public funds, emphasizing European production capacity for various components.
The proposal faces internal divisions within the European Commission, with the trade directorate expressing skepticism towards local content thresholds.
Concerns exist about the potential price increase of European-made products compared to cheaper imports from Asia, potentially affecting market competitiveness.
High energy costs and trade tensions have increased EU reliance on Chinese imports, particularly in technologies like solar panels and wind turbines.
The commission’s proposal also includes measures to promote lead markets for clean technologies and encourage the purchase of lower carbon steel within the EU.
Discussions around local content rules and the exact percentage targets are ongoing, with adjustments likely to be made before finalization.
The European Commission has refrained from commenting on the specifics of the proposal.