The European Union, on Wednesday, will unveil a plan aimed at reducing the bloc’s deep dependence on China for rare earths, as Beijing’s tight grip on the market threatens key industries across Europe.

China, the world’s largest producer of rare earth elements, shook global supply chains in October when it imposed new export controls on materials used to make high-performance magnets essential to the auto, electronics, and defense sectors. The restrictions rattled markets until Beijing later announced it would suspend the curbs for one year.

Beijing had already moved in April to require licenses for certain exports, creating new bottlenecks for manufacturers in Europe and beyond and prompting calls for swift action in Brussels.

EU industry chief Stéphane Séjourné urged the bloc to “step up,” arguing that China’s approach amounted to a “racket” that could leave European producers dangerously exposed.

The EU’s plan is expected to push for faster joint purchasing of critical raw materials, including rare earths, as well as accelerated production and recycling within Europe. It also aims to deepen cooperation with trusted partners and secure new supply agreements to diversify sourcing.

Next week, the European Commission will propose creating a European Centre for Critical Raw Materials, which would serve as the bloc’s supply hub and draw inspiration from Japan’s state-run Oil, Gas and Metals National Corporation.

Europe faces pressure on multiple fronts as China tightens controls and the United States under Donald Trump pursues broad bilateral deals to secure its own supplies. That dynamic has squeezed the EU between two powerful economic rivals.

A study released Monday by the EU Chamber of Commerce in China found that 60% of its member companies expect supply-chain disruptions due to government restrictions. Thirteen percent fear they may have to slow or even halt production.

“The situation is really urgent from our perspective,” said Florian Anderhuber, deputy director general of the Euromines lobby group. “Speed is now of the essence.”

Euromines is pushing for accelerated permitting for new mines, cuts to red tape, financial guarantees, and steps to narrow the cost gap between Chinese and European producers, which has long discouraged investment on the continent.

The European Commission will also update its strategy for protecting the bloc’s “economic security.” The original plan, issued in 2023, followed hard lessons from the COVID pandemic and Russia’s war in Ukraine, which exposed deep vulnerabilities in European supply lines.

Amid new geopolitical strains — including a U.S. administration more willing to confront allies on trade — Brussels is preparing to revise how it uses its most powerful economic tools, such as foreign-investment screening and export controls, to defend its interests.