Finance
China export controls push European firms to move supply chains
Published by Global Banking & Finance Review®
Posted on December 1, 2025
3 min readLast updated: January 20, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on December 1, 2025
3 min readLast updated: January 20, 2026
China's export controls are pushing EU firms to explore new supply chains, with many facing delays and financial impacts amid trade tensions.
By Joe Cash and Eduardo Baptista
BEIJING, Dec 1 (Reuters) - China's tightening export controls are pushing European firms to explore new supply chain capacity outside of the world's second-largest economy, a European lobbying group said on Monday, seeking cover from the U.S.-China trade war.
The European Union Chamber of Commerce in China said one in three member companies was looking to shift sourcing away from China due to Beijing's export control regime, with 40% of its flash survey's respondents reporting that the commerce ministry is processing export licences more slowly than promised.
"China's export controls have increased the uncertainty felt by European businesses operating in the country, with companies facing the risks of production slowdowns or even stoppages," said Jens Eskelund, the chamber's president.
The curbs have "added more pressure to a global trade system that was already under a great deal of stress," he added.
Some 130 companies participated in the survey, the chamber said, which counts German automakers BMW and Volkswagen, Finnish telecommunications maker Nokia and French oil major TotalEnergies as members.
Beijing shocked the U.S. in October when it threatened even tighter controls over rare-earth exports, underscoring China's willingness to flex its muscles to keep Washington pressured in trade talks. The move raised fresh concerns among European companies that their supply chains could again be upended as they had been by similar curbs in April.
April's curbs forced some EU automakers to shut down production lines, as Beijing's move to suspend exports of a wide range of rare earths and related magnets - seemingly to squeeze U.S. military contractors and automakers - caused supplies to dry up globally.
"These survey results are significant because they paint a picture that runs counter to the post-Busan summit optimism," said Alfredo Montufar-Helu, a managing director at Ankura Consulting. He was referring to a pause in Beijing's new export curbs negotiated at a U.S.-China summit in the South Korean city of Busan.
"The reality is that the deal was not signed in ink: Washington and Beijing are still debating the scope of concessions, while the EU is pushing for inclusion. Implementation is taking time, and in that gap, global supply chains are paying the price."
Nearly 70% of respondents to the chamber's flash survey said their overseas production facilities depended on Chinese components covered by the export control regime, while 50% of exporting firms reported that their suppliers or customers made goods that were subject to the controls or would be soon.
EU firms said that the commerce ministry's licence-application process was taking longer than the promised 45 days, with respondents also taking issue with its lack of transparency and disclosure requirements. They also raised concerns about potential intellectual property theft.
The survey also provided redacted examples of firms that were impacted by Beijing's export controls, including one that estimated the measures would lead to costs totalling 20% of its global revenue this year, while another said it expected to incur costs in excess of 250 million euros ($289.8 million).
But 56 out of the 131 European firms that answered the survey said the export controls would have no impact, suggesting some sectors remain insulated.
(Reporting by Joe Cash and Eduardo Baptista; Editing by Thomas Derpinghaus)
A trade war occurs when countries impose tariffs or other trade barriers on each other in response to trade policies, often leading to economic tensions.
Intellectual property theft involves the unauthorized use or reproduction of someone else's intellectual property, such as patents, copyrights, or trademarks.
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