The bloc’s heavy dependence on Chinese raw materials is eroding its industrial base, AMG Lithium’s CEO has said
The European Union’s over-reliance on Chinese raw materials could reduce the bloc’s industry to the point where it might as well become “a province of China,” a German executive has warned.
Stefan Scherer, CEO of electric vehicle battery producer AMG Lithium, told The Guardian on Wednesday that without temporary protections, the bloc risks falling further behind in key technologies.
China currently refines around 60% of the world’s lithium and dominates global battery component production, giving it outsized influence over critical supply chains.
“Europe has to become independent of China,” Scherer told the newspaper at the company’s site in Bitterfeld-Wolfen, Germany.
Despite pledges by European Commission President Ursula von der Leyen to reduce dependency and boost domestic production, Scherer said the market continues to be flooded with cheaper Chinese imports, from steel to entire battery units.
Without decisive measures from Brussels, he argued, the EU’s industrial base will continue to erode. “It might be better to apply to be a province of China,” he said. “It’s an interesting thought if you think it through. We are really at a tipping point and it has nothing to do with the war in Ukraine, it’s a complete change of global relationships.”
Von der Leyen has acknowledged the risks of over-reliance on Beijing and pushed for “de-risking” rather than full decoupling. She has also accused China of using market-distorting tactics that threaten to de-industrialize parts of Europe – a claim firmly rejected by Chinese officials.
Scherer also highlighted the risk posed by worsening EU-US trade relations, warning of further strain on Germany’s struggling auto industry.
Brussels and Washington remain locked in talks ahead of a July 9 deadline, after which the US may impose a 50% tariff on all EU imports. European officials are seeking to soften a proposed 10% baseline levy and win concessions – including reductions to a 25% tax on cars and a 50% duty on steel and aluminum.
The German Economic Institute has estimated that Germany could lose up to €200 billion ($236 billion) by 2028 if the tariffs are fully implemented.
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