In the increasingly complex and fragmented global geopolitical landscape, the idea of strategic autonomy in the EU has mutated from being a concept based purely on security and defence to a broader one, with a high economic content.1 The logic is simple: greater internalised productive capacity provides more degrees of freedom in international politics. The disengagement from Russian energy is a good example of this (see «The EU’s difficult farewell to Russian energy» in this same Monthly Report). So are the current trade negotiations with the US. With the threat of a 20% tariff announced by Trump on 2 April and a possible protectionist escalation in key sectors, such as the automotive and pharmaceutical industries, the EU has adopted a restrained approach in its responses2 while maintaining less tough rhetoric with China (de-risking rather than de-coupling).3 This may be a strategic positioning, but these decisions are understandable in light of the import dependencies that have accumulated this century across a wide range of products, from critical minerals to intermediate inputs and final products.4 Here we focus our attention on the manufacturing sector, excluding the energy branch.

Of the total supply of non-energy manufactured goods in the EU,5 the portion covered by non-EU imports increased from 15% in 2003 to 25% in 2023, with a particularly sharp increase over the last decade (see first chart). This trend reflects the consolidation of the loss of competitiveness that has been observed in Europe’s manufacturing sector since the beginning of the century,6 and which continues to take place in parallel with the gains in global market share of Chinese products7 and in EU imports (up to around 30% in 2023, representing 7% of the total supply of non-energy manufactured goods). In contrast, the dependency on the US, which was greater than in the case of China at the beginning of the period in question, has remained relatively stable over the last 15 years (at around 13% imports and 3% of the total supply).

In fact, Europe’s dependency on Chinese clothing and footwear has been declining for a decade now, in favour of other more competitive producers in Southeast Asia, such as Vietnam, reflecting the upgrading of its manufacturing sector’s production capacities. With this dynamic, we could be witnessing a similar «saturation» in the share of imports of computers and other electronic products from China (such as components, mobile phones and precision equipment), which in 2023 accounted for almost 50% of non-EU purchases (20% in 2003) and around 30% of the total supply in this industry (10% at the beginning of the period).

The branch of manufacturing that does not seem to have a brake on the EU’s ever-growing dependency is that of electrical equipment (whether for consumer products, such as household appliances, or industrial use, such as batteries and generators). Here, China now accounts for almost 60% of imports and 20% of the total supply (double the level of 10 years ago). More incipiently, and still with a moderate intensity, since 2018 there has also been a rise in the proportion of Europe’s supply of chemicals and vehicles coming from China, triggering investigations into anti-competitive practices and the adoption of protectionist measures by the EU.8

The European Commission’s roadmap to relaunch the competitiveness of our single market is an ambitious project and represents an important step in the right direction to address the structural and geostrategic economic challenges we face.9 However, achieving its goals will require a coordinated commitment from Member States which must go beyond the communion that arises in extreme situations, such as those that have put the EU on the edge of the precipice several times over the past 20 years (most recently, what appears to be the end of the Atlantic security umbrella). As a reflection of the commitment that is needed, it should be recalled that China’s broad-spectrum competitive leap responds to a long-term strategy to improve its citizens’ purchasing power. If we are to move in this same direction, we must urgently reach a consensus to revitalise European investment10 and address the current shortage of labour with the necessary skills and knowledge to boost key sectors of the economy.11