Netherlands refuses to summarily agree to US export restrictions on China over silicon chips

The United States of America has requested a number of countries in Europe and Asia to impose sanctions on Chinese chip manufacturing firms. One of these, the Netherlands, has come out and put a statement saying that they will not summarily accept new US restrictions on exporting chip-making technology to China, and is consulting with European and Asian allies.

The Dutch Trade Minister Liesje Schreinemacher on Sunday said that he expects the Dutch Prime Minister Mark Rutte to discuss export policy with President Joe Biden when Prime Minister Rutte visits the US.

In effect though, the Netherlands has stopped ASML Holding from shipping its most advanced machines to China and is only allowing them to sell machinery and technology that were made before 2019.

The Dutch government has denied ASML permission to ship its most advanced machines to China since 2019 following a pressure campaign by the Trump administration, but ASML did sell 2 billion euros worth of older machines to China in 2021.

The US took action in October to limit China’s capacity to produce its own chips, and US trade officials stated at the time that they anticipated the Netherlands and Japan to follow suit soon. ASML has said that should the rules proposed by the US come into play, it could impact roughly 5 per cent of its group sales.

According to Schreinemacher, the US has “legitimate concerns” about its over-reliance on Asia, where 80 per cent of advanced silicon chips are produced, and that he agrees with the possibility that these products may be used against the Netherlands or in military applications against its allies.

“We’ve been talking with the Americans for a long time, but they came up with new rules in October, so that changes the playing field,” said Schreinemacher. “So you can’t say that they’ve been pressuring us for two years and now we have to sign on the dotted line. And we won’t.”

Schreinemacher has said that her team is also speaking to their counterparts in Japan, South Korea, Taiwan, Germany and France on how to go about this situation.

Schreinemacher has underlined the fact that Germany has a financial interest because it is a significant supplier to ASML and to ensure that if they put a certain technology on a list of products that can’t be easily exported to China, other countries will do the same and more importantly abide by the rules.”