Trade

Spain proposes relaxing 'Made in Europe' rule to facilitate China's gradual entry into the market

Spain has proposed a classification of countries based on their proximity to the EU, as opposed to the binary model of the European Commission

25/09/2026 a las 06:30h.

Spanish Minister for Industry Jordi Hereu proposed at the European Competitiveness Council in Brussels relaxing the 'Made in Europe' rule and its binary model that ... requires 70 per cent of components to be manufactured within the EU.

Hereu suggested a gradual, tiered system to safeguard European industry while, at the same time, avoiding trade disputes with China and bringing the Asian giant closer to Europe.

The Spanish initiative forms part of the European Industrial Acceleration Act, which imposes restrictions on large-scale foreign direct investment and gives priority in public tenders and state aid to companies that manufacture at least 70 per cent of their components and carry out final assembly in Europe.

Countries such as Germany are proposing to extend this definition to economies "close" to the bloc, such as Norway, Switzerland and the UK, and even to "strategic" partners, as they fear trade retaliation from China, among other countries.

This is where the Spanish proposal comes into play, suggesting a gradual, tiered approach to 'Made in Europe'. The first tier would comprise the EU-27; the second would comprise the countries of the European Economic Area and trusted partners (such as the UKm and Canada); and a third tier comprising third countries with which the EU has a trade agreement or which are critical to the bloc as producers of critical components, such as China.

The Spanish government is proposing to relax the 'Made in Europe' requirement and allow companies whose products contain 40 per cent European components and 30 per cent from trusted countries (tier two) to also qualify for state aid. The remaining 30 per cent could come from tier-three countries. Including countries in this third tier, sources say, would be the only way to move up to the second tier.

Spain also wants all manufacturing sectors to fall under this umbrella: steel, the automotive industry, semiconductors, digital technologies, the aerospace sector, biotechnology, pharmaceuticals, etc.

Spain is proposing a framework agreement, open to negotiation on the details, with a set of criteria that would determine how countries are categorised into the three tiers. Hereu stated that the member states with which Spain was in contact while drawing up the proposal had all received it well.

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