What is de-risking in trade policy?
De-risking is a trade and security policy of reducing dependence on one country, in practice chiefly China. It applies to sensitive areas such as critical minerals and advanced technology, without cutting off trade and investment more broadly.
Also known as: derisking, economic de-risking
Researched and fact-checked by AI, with no human review. 6 sources listed below. How we verify
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Where the term comes from
European Commission President Ursula von der Leyen set out the idea in a speech on March 30, 2023. Cutting economic ties with China, known as decoupling, was neither viable nor in Europe's interest, she said. She said the European Union should aim to de-risk instead.
She listed four parts of an economic de-risking strategy:
- a more competitive and resilient EU economy
- better use of existing trade instruments
- possible new defensive tools for sensitive technologies
- alignment with partners
To show the exposure, she said the EU relied on China for 98 percent of its rare earth supply. She gave 93 percent for magnesium and 97 percent for lithium.
U.S. and Group of Seven statements used the same wording within two months. On April 27, 2023, U.S. National Security Advisor Jake Sullivan credited von der Leyen. He said Washington was for de-risking and diversifying, not decoupling. On May 20, 2023, the Group of Seven leaders' communique from Hiroshima said their policies were not designed to harm China. It pledged to reduce excessive dependencies in critical supply chains.
Why it is contested
China's premier has criticized the idea. In Berlin on June 19, 2023, Li Qiang told German executives that interdependence should not simply be equated with insecurity. He said failing to cooperate was the biggest risk. The account comes from a Xinhua report published by China's State Council.
Economists have also tracked how far trade has moved. Gita Gopinath gave a May 2024 speech as the International Monetary Fund's first deputy managing director. She said China's share of U.S. imports fell by 8 percentage points between 2017 and 2023. She said some trade and investment was being rerouted through third countries, notably Mexico and Vietnam. She called it an open question whether this had made supply chains more resilient.
Where things stand in 2026
Von der Leyen was still describing EU policy in these terms in mid-2026. Her statement dated June 19, 2026 followed a European Council meeting. In it, she said EU imports from China had risen 45 percent over five years. She said the bloc's trade deficit with China reached a record 360 billion euros in 2025.
She said the EU was accelerating de-risking, not decoupling. The Commission would work on new tools such as a diversification instrument, she said. She added that dialogue with China remained crucial.
Sources
- Speech by President von der Leyen on EU-China relations to the Mercator Institute for China Studies and the European Policy Centre, European Commission
- Remarks by National Security Advisor Jake Sullivan on Renewing American Economic Leadership at the Brookings Institution, The White House (Biden administration archive)
- G7 Hiroshima Leaders’ Communiqué, The White House (Biden administration archive)
- Chinese premier calls for upholding economic globalization, China-Germany win-win cooperation, The State Council of the People's Republic of China (Xinhua)
- Geopolitics and its Impact on Global Trade and the Dollar, International Monetary Fund
- Statement by President von der Leyen at the joint press conference with President Costa following the meeting of the European Council of June 2026, European Commission
