Dutch foreign trade minister refuses to give in to US pressure to curb chip exports to China

beijingwalker · Jan 20, 2023

Dutch foreign trade minister refuses to give in to US pressure to curb chip exports to China

The US has been trying to cajole Japan and the Netherlands to impose some strict sanctions that would cripple China’s chip-making industry. China is the second largest chip manufacturer after Taiwan and a vital cog in the global semiconductor trade.

Mehul Reuben Das January 20, 2023 10:56:14 IST

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The US has been trying to cajole Japan and the Netherlands to impose some strict sanctions that would cripple China’s chip-making industry. China is the second largest chip manufacturer after Taiwan and a vital cog in the global semiconductor trade. Image Credit: ASML

During a panel discussion on semiconductors on Thursday at the World Economic Forum in Davos, Switzerland, Dutch Foreign Trade Minister Liesje Schreinemacher vowed to fight for “free trade” in light of recent US diplomatic pressure on other nations to support stricter tech curbs on China.

In order to halt China’s advancement in the field, the Biden administration has increased pressure on a number of nations in the global semiconductor supply chain, notably the Netherlands, to further restrict the shipment of sophisticated chipsand other US-origin chip-making equipment and technology to China.

The US has been targeting China’s tech industry, especially the semiconductor and chip-making sector, under the garb of national security because it believes that the Chinese military’s continuous digitalization threatens the peace in the area. In response, China has complained to the World Commerce Organization and criticised US limitations as an attack on free trade.

“Obviously in order to have the [semiconductor] value chain still in place, we need open trade,” said Schreinemacher during a panel discussion on the lessons to be learned from semiconductor supply shocks. She also said that big-ticket government subsidies were not her “definition of open trade”. “I know this area is under a lot of pressure internationally, but I will be fighting for open trade and prevent protectionism,” said Schreinemacher.

She added that nations must cooperate to protect the integrity of the global semiconductor supply chain, including those in Asia like South Korea and others that “could serve as a production location,” which could refer to China, whose importance to the supply chain had been growing before the US intervened, particularly in mature technology.

The US stepped up its semiconductor export controls on China in October, and Washington has been lobbying the Netherlands and Japan to fall into line.

Reports about the Dutch government’s position on the matter have been inconclusive. Japan and the Netherlands have agreed to strengthen export limits on sophisticated chipmaking technologies to China, according to a December Bloomberg news story citing unnamed sources. But, as per Reuters, Schreinemacher reportedly stated on Sunday that the nation would not summarily embrace US demands on sanctioningchip technology.

In addition, Intel CEO Pat Gelsinger stated during the panel discussion that China’s government policies have greatly increased the country’s involvement in the global semiconductor business. There cannot be disengagement since they play such a significant role, he said, adding that they are currently the largest manufacturer outside of Taiwan.