The article proposes an enhanced methodology to identify 204 products in sensitive industrial ecosystems where the EU faces foreign dependencies. It detects that around 70% of the products identified by European Commission (2021) are present in the results from this enhanced methodology, suggesting that factors such as the EU economic and industrial structure, as well as historical trade relations underlie these dependencies.

Two findings derive from this exercise. First, mapping vulnerabilities across EU supply chains, including the risks of non-availability of critical goods, can prove valuable to develop early warning systems to monitor supply chain distress. The enhanced methodology permits to differentiate between products with potential for diversification and those where further trade diversification might be limited. It thus helps to detect ex-ante vulnerabilities stemming from structural dependencies associated with higher risks of supply distress.

Finally, the methodology allows to identify products for which substitutability can only happen through the increase of the EU’s internal capacity. Consequently, disruptions in these products are particularly prone to bear an impact on the EU’s resilience, resulting in non-availability in the event of shocks. The development of internal EU capacity around those products (e.g. within the electronics ecosystem), including through strong investments and R&D deployment, can contribute to increase substitutability.