Spain Proposed Tiered EU Manufacturing Requirements
The plan aims to modernize industrial aid rules by categorizing suppliers based on trade and regional partnerships.
Updated on Sept. 25, 2026 in Manufacturing
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Spain has introduced a three-tier system to reform the European Union's Made in Europe manufacturing rules. The proposal seeks to balance the protection of domestic industry with the maintenance of vital global trade relations.
Why it matters
The initiative intends to safeguard European industrial interests while preventing potential trade disputes with critical partners like China. It offers a new path for companies to access state aid by diversifying their component supply chains.
Current rules mandate that 70 per cent of components must be manufactured within the EU. The new proposal would allow companies to qualify for aid using 40 per cent European and 30 per cent tier-two components, with the final 30 per cent sourced from tier-three nations.
The players
Jordi Hereu
He is the Spanish official who formally presented the tiered manufacturing proposal in Brussels.
European Union
This is the political and economic union of 27 member states currently debating changes to its industrial support framework.
The details
The proposal covers key sectors including automotive, aerospace, semiconductors, biotechnology, pharmaceuticals, digital technologies, and steel. It establishes tiers ranging from the EU-27 to trusted partners like the UK and Canada, and finally to third countries critical to the bloc.
Timeline
Jordi Hereu proposed the plan in Brussels on September 24, 2026.
Market Landscape
This proposal marks a shift from the rigid requirements of the European Industrial Acceleration Act to a more flexible, partner-oriented framework. It reflects a broader European strategy to remain competitive in global supply chains without triggering retaliatory trade measures.
Manufacturers may see shifts in production sourcing strategies as companies seek to meet these proposed eligibility criteria for state aid. These changes could eventually influence the cost and availability of goods across sectors like automotive and digital technology.
The takeaway
The proposal reflects a tactical shift toward pragmatic international cooperation in the face of complex global supply chain dependencies. Businesses should monitor upcoming negotiations as these tiers will dictate future eligibility for critical state industrial subsidies.
Further reading
Learn more about the latest industrial policies in the Manufacturing section.
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