Sandwiched between US President Donald Trump’s “America First” policies and China’s heavy incentives for domestic producers, the European Union wants to give its own companies preferential treatment when bidding for hi-tech contracts.

The move – to be proposed on Wednesday in a programme designed to turbo-boost the bloc’s lagging competitiveness – could put it on a collision course with World Trade Organization rules, which forbid discrimination between domestic and foreign suppliers in procurement tenders.

“The commission will propose the introduction of a European preference in public procurement for critical sectors and technologies through a review of the Public Procurement Directive,” reads a leaked draft of Brussels’ new “competitiveness compass”.

“The review aims at reinforcing technological security and domestic supply chains, as well as simplifying and modernising rules, in particular for start-ups and innovative companies,” it adds.

The proposal comes just weeks after Brussels determined after an investigation that Beijing’s “buy local” provisions in China’s medical devices sector were illegal. Chinese firms could face exclusion from the EU’s procurement markets in retaliation.

It also marks a continued drift for Europe towards policies that support local manufacturing. Through a range of tools, the EU has promoted the use of “non-price” criteria in selecting winners of procurement tenders.