EU should not boost resilience at the expense of its partners

By the Editorial Team · Thursday, September 17, 2026

The European Union’s proposed Industrial Accelerator Act sets financial support criteria requiring a minimum EU content in products like electric vehicles, which may disadvantage partner countries such as Japan by excluding goods partially produced outside the EU from qualifying. This approach has sparked debate over maintaining global supply chain integration and preserving strategic partnerships critical to Europe’s industrial resilience and competitiveness.

The European Union’s proposed Industrial Accelerator Act (IAA), which aims to bolster European competitiveness and reduce strategic vulnerabilities, has raised concerns over potential negative impacts on partner countries, particularly Japan. The legislation’s conditions for financial support in sectors such as electric vehicles hinge on meeting specific EU content requirements, rules some experts argue may conflict with World Trade Organization (WTO) standards and overlook the complexities of modern global supply chains.

The core issue centers on how the IAA treats products that incorporate EU-made components but undergo further production outside the bloc before returning as finished goods. Under the proposed rules, these products might no longer qualify as European, a provision that could inadvertently affect not only foreign companies but also EU-based manufacturers integrated into international networks. Critics emphasize that such stipulations risk penalizing long-established partners that have invested significantly within Europe.

Japanese automobile manufacturers exemplify this concern, having produced approximately 614,000 vehicles in the EU in 2025. Operating 13 manufacturing sites and 19 research and development centres employing roughly 160,000 Europeans, these companies form a substantial part of the continent’s industrial ecosystem. Advocates for a more inclusive approach assert that enhancing Europe’s industrial resilience should focus on fostering secure and reliable supply chains involving trusted partners like Japan, rather than emphasizing national origin or the location of specific production stages.

The issue is reflective of a broader tension between safeguarding domestic industry and upholding the realities of globalized production, which involves cross-border investments, technology sharing, and long-term cooperation. Supporters of the IAA argue that governments have the right to promote domestic investment and apply conditions on public aid consistent with international norms. However, questions remain whether the current proposals adequately reflect the interconnected nature of supply chains or risk undermining valuable international partnerships.

Illustrating successful collaboration, Japanese and European entities are working together on critical minerals projects. For instance, France’s rare earth refining initiative is supported by Japanese companies, with both sides investing around €206 million and securing long-term supply agreements. This joint effort includes processing recycled materials and is cited as a model for resilient supply chains that blend European industrial capacity with trusted foreign investment and technology.

In a geopolitical and economic environment marked by increasing challenges, proponents stress that cooperation between the EU and countries like Japan is essential to overcoming obstacles. They advocate for policy designs that balance industrial sovereignty with global integration to sustain competitiveness and economic security without isolating key partners.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.