EU Warns Firms: "Toothpaste Without China" Shows Supply Chain Danger

A major European business group is urging companies to reduce their reliance on both China and the United States for critical supplies. The warning comes as firms face pressure from Chinese policies favoring local companies and unpredictable U.S. trade actions. The European Union Chamber of Commerce in China issued the advice in a new report. It tells companies to "eliminate single-source dependencies" on either giant economy. The goal is to build more resilient supply chains. The report uses a simple example to make its point. It asks if a company could still make toothpaste if it could not get materials from China. This highlights the risk of depending too much on one country. Firms are caught between two challenges. In China, they face rules that give local competitors an advantage. From the U.S., they face sudden shifts in trade policy and tariffs. The Chamber's report advises a strategy called "China + 1 + 1." This means companies should keep some operations in China but add supply sources in other countries, too. Southeast Asia and Europe itself are possible options. This move is not about leaving China completely, the group says. Instead, it is about managing risk by spreading out where a company buys materials and makes products.