No Progress on Netherlands Joining US Chip-Export Ban to China

In his meeting Tuesday with Dutch Prime Minister Mark Rutte at the White House, U.S. President Joe Biden appeared to have made no progress persuading the Netherlands to support new U.S. restrictions on exporting chip-making technology to China, a key part of Washington’s strategy in its rivalry against Beijing.

During a brief appearance in front of reporters before their meeting, Biden said he and Rutte have been working on “how to keep a free and open Indo-Pacific” to “meet the challenges of China.”

“Simply put, our companies, our countries, have been so far just lockstep in what we’ve done, and our vision for the future. So today, I look forward to discussing how we can further deepen our relationship and securing our supply chains to strengthen our transatlantic partnership,” he added.

White House press secretary Karine Jean-Pierre said the administration will continue its efforts.

“We don’t push any of our allies or our partners. We consult with them closely, and they make their own decisions,” she said in a briefing to reporters on Tuesday.

ASML Holding NV, producer of the world’s most advanced semiconductor lithography systems required to manufacture the most advanced chips, is headquartered in Veldhoven, making the Netherlands key to Washington’s chips push against Beijing.

Ahead of Rutte’s visit, Dutch Trade Minister Liesje Schreinemacher said the Netherlands is consulting with European and Asian allies and will not automatically accept the new restrictions that the U.S. Commerce Department launched in October.

“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,” she said.

Rutte did not mention the semiconductor issue ahead of his meeting with Biden, focusing instead on Russia’s invasion of Ukraine, where the NATO allies have been working together to support Kyiv.

“Let’s stay closely together this year,” Rutte said. “And hopefully, things will move forward in a way which is acceptable for Ukraine.”

Tech supremacy

The battle for U.S. tech supremacy and Washington’s effort to cut off critical technology supplies to Chinese companies began under the administration of former President Donald Trump. Biden took it further by trying to consolidate allies behind the effort, including the Netherlands, Japan, South Korea and Taiwan — home to leading companies that play key roles in the industry’s supply chain.

Allies’ support is crucial, according to an analysis by the Center for Strategic and International Studies (CSIS). If they do not implement complementary export controls, the U.S. sanctions will cause Chinese buyers to “revise their shopping lists” and replace American devices and equipment with comparable foreign components.

There’s a clear strategic interest in diversifying the supply chain, but the reality is complicated, said Sujai Shivakumar, director of the Renewing American Innovation Project at CSIS.

“This is a major shift, and so, there needs to be coordination … because this impacts a very complex supply chain that spans the world,” Shivakumar told VOA. “It’s a major realignment. It’s a major rewiring. So, there are a lot of details within that broader strategic shift that [have] to be worked out.”

Fifteen percent of ASML’s sales are in China, and the company [has] “already sacrificed,” Peter Wennink, CEO of ASML, said in a December interview with NRC newspaper. He said that following U.S. pressure, the Dutch government has restricted the company from exporting its most advanced lithography machines to China since 2019.

Last week, Biden hosted Japanese Prime Minister Fumio Kishida, who said he backs Biden’s attempt but did not agree to match the sweeping curbs targeting China’s semiconductor and supercomputing industries.

Like the U.S., Japan has launched an ambitious program to bring back cutting-edge semiconductor manufacturing domestically, part of the Kishida government’s broader strategy to respond to global supply chain disruptions and try to contain China.

U.S. officials say export restrictions on chips are necessary because China can use semiconductors to advance their military systems, including weapons of mass destruction, and to commit human rights abuses.

The October restrictions follow the U.S. Congress’ July passing of the CHIPS Act of 2022, which provides $52 billion to strengthen domestic semiconductor manufacturing, design and research, and reinforce America’s chip supply chains. The legislation also restricts companies that receive U.S. subsidies from investing in and expanding cutting-edge chipmaking facilities in China.

Beijing has invested heavily in its semiconductor industry as Washington has sought to cut it out of the semiconductor supply chain. In 2015, China laid out plans to invest $1.4 trillion in advanced technologies, aiming to achieve 70% self-sufficiency in semiconductors by 2025.

Some information for this report came from The Associated Press.



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