The eu strengthens its industry and reduces dependencies

Marketing communication 30 July 2026

The EU strengthens its industry and reduces dependencies Special

Contents RaboResearch Industry under pressure 1 The biggest risks: retaliation and division 7 Global Economics & Stimulating strategic industries and technology 2 Conclusion 7 Markets Protecting the domestic industry against imports 3 Appendix 1: Critical (strategic) raw materials 9 knowledge.rabobank.com Diversification of supply chains 5 Appendix 2: Digital independence 9

Maartje Wijffelaars Senior Economist Summary  Plans to strengthen the European industry and reduce foreign dependencies are becoming Leander Kalff more concrete and coherent, but much work needs to be done to make these plans reality.  Brussels wants to stimulate European industry by improving access to financing, cutting red tape, and via preferential treatment in public tenders.  Higher trade barriers should protect the industry better, and the EU wants to diversify supply chains and broaden its export market.  Economic coercion and retaliation by major powers such as China and the US, and disagreement between EU member states, pose risks to the EU’s industrial policy.

Industry under pressure Strengthening and protecting Europe’s industry has been high on Brussels’ policy agenda for some time now. The sector is under pressure from growing competition from China, high energy prices, and the short-term costs of decarbonisation. This weighs on current and longer-term economic growth.

Foreign dependencies also make the EU vulnerable to economic coercion and global supply chain disruptions. For example, the EU relies heavily on China for critical raw materials and clean tech, and on the US for energy, weapons, and digital technology.

This report provides a non-exhaustive overview of EU initiatives and legislation aimed at strengthening the industry and reducing dependencies through stimulating the domestic industry, protection against external competition, and diversification of supply chains.

Figure 1: Low- to medium-technology Figure 2: Chinese competition pushes part of production is under pressure; high-tech European production out of the market production has grown strongly 30 20

EU-China trade balance, 10 0 -10 -20

EUR billion - Vehicles Chemicals Machinery 2016 2025

Source: Macrobond, Eurostat, RaboResearch Source: Macrobond, Eurostat, Trademap, RaboResearch

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Stimulating strategic industries and technology Brussels wants to strengthen Europe’s industrial base and reduce the bloc’s dependencies by stimulating strategic industrial capacity within the EU.

In recent years, the EU has set up public-private financing structures, it has relaxed state aid rules, and it has accelerated permitting procedures for the development of strategic sectors, including the raw materials industry, semiconductors and related technologies, clean technology, defence, and the decarbonisation of energy-intensive industry.1

On top of that, European legislation creates demand for the European defence industry. EU funds and cheap SAFE loans require that governments purchase part of their procurement from within the bloc. This is already happening: Romania’s order for air defence radars is just one example.

The European Commission’s new proposals expand the number of sectors that may receive support, and ways that support is provided. The Commission launched the Chips Act 2.0 and the Cloud and AI Act to promote chip production, the construction of data centres, and the development of cloud and AI capabilities (see Appendix 2). The Industrial Accelerator Act aims to streamline permitting and create demand for green energy-intensive products, the automotive industry, and net-zero technologies.

Industrial Accelerator Act: under negotiation The Commission wants to introduce “Made in EU” and CO2 requirements in public tenders, auctions, and support schemes (e.g. subsidies) for net-zero technologies, in construction, and for the purchase of cars. In construction and the traditional automotive sector, these requirements are linked to the…